Sunday, February 15, 2009

Don't Trade With E-Trade

I like to dispense advice that helps people.

A lot of it goes unheeded. Things like;

"We should not make any more real estate loans."


"X-Box Sucks"


"Iceland should become a tax haven if it wants to get out of its economic crisis."

But while I cannot get entire governments or entire banking corporations to do what I say, perhaps I can get a couple individuals to save themselves the pain and agony of dealing with ETrade.

I had a small online account with E-Trade. Waiting patiently, biding my time for the bottom to hit, I was in no rush to trade and had a little cash built up.

I went online to see how the few stocks I had in the account were doing and saw a $40 "fee."

Apparently I'm not the only one this has happened to. Students of mine have also complained about this where if you don't trade once a month or something, you get charged a fee.

I called up the customer service guy, read him the riot act and closed my account.

And though I am not Drudge Report or anything like that, perhaps Etrade and other financial servicing firms out there who have decided to pad their wallets with hidden "fees" will think twice before screwing individuals over.

Who knows, they may even embrace a business model that SERVES THE CUSTOMER!

Ho ho! Now I'm getting loopy. A US finance firm that doesn't screw over the public.


Josh Peck said...

#1 reason I'm with scottrade now. I'm willing to pay a little more pre-trade to avoid getting suck with inactivity fees.

Anonymous said...

Looking at firing my full service broker.

Ok, one vote against e-trade, one vote for scottrade.

Any other recommendations for a discount broker?

TD-ameritrade anyone?

Hot Sam said...

Shame on you for signing on the dotted line without reading the fine print!

I share your outrage. How in the world can they justify a fee for inactivity? The fee is merely an incentive to churn your own account. I'm sure their contract with you is ironclad, but the SEC might have a problem with such fees or the impact they have on trading volatility. Leaving and telling friends is the best revenge. Call the SEC. A BBB complaint or a letter to your congressman might work: at least it will annoy them.

On some online accounts, the fine print says they can confiscate the entire balance the inactivity for more than 6 months. This is even more shameful in that they collect tens of millions in interest off of accounts they pay no interest on.

I can be ashamed of being caught up numerous times in automatic renewal traps. I shudder to think what is hidden in the EULAs of software I've purchased or downloaded.

Anonymous said...

Robert, EULA's usually have something like this:

I thought it was funny, anyway. :)

Anonymous said...

I'm with Banc of America Investments and can vouch for them. If you have a basic checking account with Bank of America (which doesn't cost anything) you pay no maintenance fees, get $10 trades and a decent website (albeit basic compared to Scottrade's).

They do not cater to day traders, have customer service open on Saturday, and have a free trade option for people with a minimum of $25,000 in bank accounts.

The customer service is good too, rarely do I get people telling me two different things if I need to call back for something. Oh, one negative. You can't complete most forms online, most need to be faxed or mailed in.