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I just got 3 overnight UPS letters from Charles Schwab telling me that they are closing all of my accounts, brokerage and banking. I currently have an individual brokerage account, a joint brokerage and checking/savings accounts with my wife, and my wife and son have joint brokerage and checking accounts. We do not use the brokerage accounts and my primary use of the checking account is for remote deposit and free ATM access (but not more than 3 ATM withdrawals per month). My son is at college and we opened the account for him so he could get free ATM access and do remote deposit while he is at school (Schwab even advertises this use on their website).

I got a call from a woman at a local branch a few weeks ago asking about my accounts, and specifically asking abut the rebate checks I had been depositing (my main bank is Citibank but their remote deposit feature is terrible to use so I would deposit to Schwab and when the total got high I would transfer it out). I did not do anything remotely illegal on the accounts.

The letter basically asid "the agreement says we have the right to close your account for any reason and we are exercising this right".

Has anyone else seen something like this from Schwab???

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I told her I was at the doctor's office and I thought I answered her questions. I told her how I got the checks and that... (more)

billrubin (May. 23, 2012 @ 5:23p) |

Sorry this worked out poorly for you.

If you kept the funds all at one institution instead rather than transferring the... (more)

grex23 (May. 23, 2012 @ 8:01p) |

The problem is the bank won't say the reason, instead they told this person apparently that they were going to send them... (more)

grex23 (May. 23, 2012 @ 8:04p) |

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ha ha

OH NOOOOOOOOOOO!!

I just called and spoke to someone and they would not give me any information on why they did it. I hope my son doesn't need any cash between now and when he comes home from school next week since this is his only ATM card.

Your son is using drugs..

Did you ask them to extend the closing of the accounts while explaining that the usage you where doing was what they listed on their website?

Maybe they will not keep it open, but won't close it for a week.

As for kids away at college, I do not have any first hand knowledge, but friends with kids at college have told me about having a Credit Union Bank at home and using the ATM at other CU ATMs at the college town, and they are usually fee-free. You might want to look into that.

They sent three separate letters via Overnight mail? Even when banks and financial institutions are trying to cut their losses they are still complete idiots.

I have not received anything yet. This would be sad. My primary use of Schwab is similar to yours - except I use the ATM withdrawal for when I travel domestically and internationally. (Checking balance is about $2500, $0 brokerage )

UPS generally comes in the afternoon here. but ... I have not been notified by UPS of a delivery. I'll post if I get something

MilleniumBuc said:   Did you ask them to extend the closing of the accounts while explaining that the usage you where doing was what they listed on their website?

Maybe they will not keep it open, but won't close it for a week.

As for kids away at college, I do not have any first hand knowledge, but friends with kids at college have told me about having a Credit Union Bank at home and using the ATM at other CU ATMs at the college town, and they are usually fee-free. You might want to look into that.
I asked if they could extend it for my son's account and I was told that it was already closed. He initially told me that they were giving me advance notice of the closing, but then I pointed out that the letter said they were being closed today.

The nice thing about having an account with Scwhab for my son was the ATM fee rebate and the mobile deposit when he got checks at school. I actually have another account with him at a bank that refunds ATM fees, and it turns out he does have that ATM card with him (I didn't think that he did). But they do not have a mobile app. Schwab actually advertises their checking account as a college student account on their website for these exact reasons. We even had transferred some money into his Schwab brokerage account so he could buy some ETF's, although he never got around to doing so.

ellory said:   I have not received anything yet. This would be sad. My primary use of Schwab is similar to yours - except I use the ATM withdrawal for when I travel domestically and internationally. (Checking balance is about $2500, $0 brokerage )

UPS generally comes in the afternoon here. but ... I have not been notified by UPS of a delivery. I'll post if I get something

Yes, I used the ATM card for withdrawals while traveling as well (I last used it on our cruise in December). Especially handy when using foreign ATMs.

This was sent UPS Next Day Air. Not sure what the deadline for delivery on that is but we usually do not get UPS until late afternoon, either.

Maybe I should have called the woman back who called me a few weeks ago (I had a caller id #). I was not in the mood to speak for an extended period when she called since I was at a doctor's office.

donotdrinkPBR said:   They sent three separate letters via Overnight mail? Even when banks and financial institutions are trying to cut their losses they are still complete idiots.The accounts were in different names. I wonder if my son is going to get one at school since the letter for that account only had my wife's name on it and they have his school address. I hope they do not send the check to him after he leaves for the semester.

I foresee another credit union convert!

I hold no ill will against these zombie FIs. They are welcome to enforce their TOS anytime. I no longer worry about the "why" so long as they abide by their TOS. In return I feel happy to maximize usage of their bonehead promos (TY Citi, Chase, BofA, FNBO; others, I will share my love with you soon).

Sorry to hear about the issue with your son, BR. Seems like a great time for him to take on more responsibility in his financial affairs.

OP: ETrade offers free mobile deposit and unlimited free ATMs. Big fan of their service.

billrubin said:   I just got 3 overnight UPS letters from Charles Schwab telling me that they are closing all of my accounts, brokerage and banking. I currently have a single brokerage account, a joint brokerage and checking/savings accounts with my wife, and my wife and son have joint brokerage and checking accounts. We do not use the brokerage accounts and my primary use of the checking account is for remote deposit and free ATM access (but not more than 3 ATM withdrawals per month). My son is at college and we opened the account for him so he could get free ATM access and do remote deposit while he is at school (Schwab even advertises this use on their website).

I got a call from a woman at a local branch a few weeks ago asking about my accounts, and specifically asking abut the rebate checks I had been depositing (my main bank is Citibank but their remote deposit feature is terrible to use so I would deposit to Schwab and when the total got high I would transfer it out). I did not do anything remotely illegal on the accounts.

The letter basically aid "the agreement says we have the right to close eyour account for any reason and we are exercising this right".

Has anyone else seen something like this from Schwab???


Probably they are closing it because you are costing them a LOT of money. They're not making any money from commissions, and they have to pay the banks that your son is withdrawing the money from. You probably also don't leave much money so they can't even earn interest, right?

I think if you weren't using it so frequently, then they'd be ok with the cost of maintaining your account.

Welcome to the megabanking world!

Chase does this all the time, except they don't even give written notice until ~2 weeks after the fact!

Alliant CU may be your best option.

slc39 said:   Probably they are closing it because you are costing them a LOT of money. They're not making any money from commissions, and they have to pay the banks that your son is withdrawing the money from. You probably also don't leave much money so they can't even earn interest, right?

I think if you weren't using it so frequently, then they'd be ok with the cost of maintaining your account.

My son does 2-3 withdrawals a month. Except when on vacation, I did none (I probably did 2 in the last 12 months). We had around $1500 in each account. I even still had a few hundred in the Schwab High Yield Savings (which was not high yield).

I think that I somehow got flagged because of the number of checks I was depositing. I got a call from the local branch last month asking about all the rebate checks I was depositing (I found it interesting they knew that) and how I got them. I told the person they were completely legitimate. I also deposited other sort of checks. It was a very strange call and I did mean to call to person back to discuss but never got around to it. I never expect this to be the outcome.

sloppy1 said:   Chase does this all the time, except they don't even give written notice until ~2 weeks after the fact!

Alliant CU may be your best option.

Yes, I have read about Chase doing it but I always figured there was something shady going on. Maybe not.

BTW my son also had a Chase checking account because they had a $200 offer at the local branch, but he does not use it (and of course they do not refund ATM fees so he would not want to use it) and does not have the ATM card with him at school. He could use it for remote deposit, if necessary.

BTW, I had my dates wrong. They closed the accounts as of yesterday.

Venturion said:   I foresee another credit union convert!

I hold no ill will against these zombie FIs.


I don't think Schwab can be considered a "zombie financial institution," they are primarily a brokerage institution, not a bank, they simply offer banking services as a convenience to their brokerage customers. When people only use their banking services, they're probably losing money on the deal. OP would definitely be better served at a credit union.

They are suspecting that you are using it for some sort of business with all the check deposits.

raringvt said:   Venturion said:   I foresee another credit union convert!

I hold no ill will against these zombie FIs.


I don't think Schwab can be considered a "zombie financial institution," they are primarily a brokerage institution, not a bank, they simply offer banking services as a convenience to their brokerage customers. When people only use their banking services, they're probably losing money on the deal. OP would definitely be better served at a credit union.

They have a bank and they advertise their bank accounts on the home page. If you go to the home page you'll see they even advertise their checking account for students as a great way for them to get access to money without fees. It's not like they are hiding this and trying to make it an accommodation for their brokerage customers.

http://www.schwab.com/public/schwab/banking_lending/checking_acc...

billrubin said: I got a call from a woman at a local branch a few weeks ago asking about my accounts, and specifically asking abut the rebate checks I had been depositing (my main bank is Citibank but their remote deposit feature is terrible to use so I would deposit to Schwab and when the total got high I would transfer it out).
billrubin said:   
Maybe I should have called the woman back who called me a few weeks ago (I had a caller id #). I was not in the mood to speak for an extended period when she called since I was at a doctor's office.
You can be relatively certain this is what prompted the current consequences. How many rebate checks are we talking over a typical month?

jeeves said:   They are suspecting that you are using it for some sort of business with all the check deposits. I guess that is a possibility. But then they go ahead and close all of our accounts? What will happen if my son tries to open account with them in the future? Is he likely to be permanently blacklisted?

Glitch99 said:   billrubin said: I got a call from a woman at a local branch a few weeks ago asking about my accounts, and specifically asking abut the rebate checks I had been depositing (my main bank is Citibank but their remote deposit feature is terrible to use so I would deposit to Schwab and when the total got high I would transfer it out).
billrubin said:   
Maybe I should have called the woman back who called me a few weeks ago (I had a caller id #). I was not in the mood to speak for an extended period when she called since I was at a doctor's office.
You can be relatively certain this is what prompted the current consequences. How many rebate checks are we talking over a typical month?
I just checked and I deposited around 25 checks in each the last few months (not as many last month). Not all of them were rebate checks. I guess maybe I should have deposited some in other accounts, and certainly after the phone call? I basically stopped using Citi ATM's because they do not read postcard checks, and I stopped using their mobile app for deposits because they make you enter your ATM card number each time you go to make a deposit. It seems like their technological incompetence may have caused me to have these problems with Schwab since I was using them as an alternative.

Do the mobile deposits have to be manually reviewed by a person before they are posted to your account? If so, perhaps all of the deposits, not the ATM withdrawals, were what were costing Schwab too much money and were the reason they went ahead and closed what they considered to be unprofitable accounts.

I understand they widely advertise their banking services, but I can see how they would be willing to take a loss on the bank side in return for business on the brokerage side.

When they close a brokeage account, do they just liquidate all your holdings into cash? That could potentially cause you actual losses.

You are simply costing them more money than you are making them. Their primary purpose is as a brokerage.

billrubin said:   raringvt said:   Venturion said:   I foresee another credit union convert!

I hold no ill will against these zombie FIs.


I don't think Schwab can be considered a "zombie financial institution," they are primarily a brokerage institution, not a bank, they simply offer banking services as a convenience to their brokerage customers. When people only use their banking services, they're probably losing money on the deal. OP would definitely be better served at a credit union.

They have a bank and they advertise their bank accounts on the home page. If you go to the home page you'll see they even advertise their checking account for students as a great way for them to get access to money without fees. It's not like they are hiding this and trying to make it an accommodation for their brokerage customers.

http://www.schwab.com/public/schwab/banking_lending/checking_acc...


"...The Schwab Bank High Yield Investor Checking account is available only as a linked account with a Schwab One brokerage account..."

SUB said:   When they close a brokeage account, do they just liquidate all your holdings into cash? That could potentially cause you actual losses.That's the only account they did not close immediately. They gave me a month to transfer the shares elsewhere. If I do not they will request a certificate if one can be issued.

Amusingly my Schwab HY Savings account still has money in it (the other accounts have disappeared and I can't login to my wife's account) They never managed to fully integrate that account into their systems. You could not request online statements or transfer money as cleanly as you could between the checking account. I wonder how long it will take them to get the money out of there.

And my son got the same mailing at his school address. They are nothing if not thorough.

dwt79 said:   Do the mobile deposits have to be manually reviewed by a person before they are posted to your account? If so, perhaps all of the deposits, not the ATM withdrawals, were what were costing Schwab too much money and were the reason they went ahead and closed what they considered to be unprofitable accounts.

I understand they widely advertise their banking services, but I can see how they would be willing to take a loss on the bank side in return for business on the brokerage side.
Does making deposits actually cost them money? I can see if I used the ATM on a regular basis since that is real money. And while I typically did transfer the money out after it got to a high level, it's not like I was depositing them and immediately withdrawing the money.

As for manual review, it's possible. The deposit was pending until you got an email several hours later. But in all my time doing this, I had one rejected after the app accepted it, and that was a while ago. If the app count not read it, it would reject it immediately and make you try again.

Given that business accounts often charge for check deposits, I must assume it costs them some amount of money.

INGDirect just rolled out their mobile app for depositing scanned checks. If there aren't enough ING network ATMs where you need them, then local CCUs might provide free withdrawals.
I'm sure there are plenty of other options for you. Don't bother "talking to Chuck".

RaringVT and BR - you're right, Schwab isn't in the same league as the TDTS (too dumb to succeed) camp.

However, what's becoming an obvious trend is that if you get a call from the bank (compliance officer or otherwise), it's time to move your business. No matter how legitimate your response or activity is, when you get the call, the clock has started ticking.

robertsdoug said:   You are simply costing them more money than you are making them. Their primary purpose is as a brokerage.
That isnt the reason this happened; his account was flagged for suspicious check deposits or it was a random account audit/review (or the son did something he hasnt told dad about...). Although the nature of how he used the account likely contributed to their unwillingness to give him the benefit of the doubt when deciding what action to take.

Glitch99 said:   That isnt the reason this happened; his account was flagged for suspicious check deposits or it was a random account audit/review (or the son did something he hasnt told dad about...). Although the nature of how he used the account likely contributed to their unwillingness to give him the benefit of the doubt when deciding what action to take.Definitely not anything my son did. He deposits a couple of checks a month at most and makes 2 or 3 withdrawals.

does chase close chase checking and chase card accounts if you deposit lots of checks every month on personal checking account? i think i read somewhere where someone said all his chase card including chase checking was closed becos he deposits lots of checks .

You need to have more money in the accounts.

This is the very reason I hesitate to close accounts right after they make bonus payments.

Feel bad for electric company that received 17 billpays of $1.xx so far this month.

Hm? I do direct deposits into my Schwab Bank account every two weeks, and overseas family pulls money out of the account two or three times a month. Never use if for check deposits, and I store ~$9K in the account. My Schwab brokerage account is a complete zombie.

Hope this experience doesn't spread because the banking account is very useful to us.

Skipping 59 Messages...
jimmybgood said:   billrubin said:   
Maybe I should have called the woman back who called me a few weeks ago (I had a caller id #). I was not in the mood to speak for an extended period when she called since I was at a doctor's office.


So Schwab's representative called you about rebate checks you were depositing. It was probably some security algorithm that nobody understands. Before they were satisfied with your response, you ended the conversation. I imagine the rebate checks were all legitimate. I totally sympathize with your reason for ending the conversation, but from their view you must have seemed evasive.

I'd have closed your accounts, too. Why take a risk? If you had said something like, "Hey, this is a bad time, can I get back with you?" and then did, I bet you could have worked things out and kept your accounts.

I really don't think somebody sat down, analyzed your account and decided they were losing money on you. I think some computer tripped over your account and when they tried talking to you about it, you didn't satisfy their curiosity.


The problem is the bank won't say the reason, instead they told this person apparently that they were going to send them their money back.



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