Robinhood Users Say Accounts Were Looted, No One to Call
(Bloomberg) - It took Soraya Bagheri a day to learn that 450 shares of Moderna Inc. had been liquidated on her Robinhood account and that $ 10,000 had been paid out. After alerting the online broker of a theft, she received a frustrating email.
The company said it would investigate and respond within "a few weeks." Now your money is gone.
Bagheri is one of five Robinhood clients who shared experiences similar to Bloomberg News, saying they had been pending in the last few weeks after someone sold their investments and withdrew money. Since the hugely popular app doesn't have an emergency number, some have said they tried in vain to intervene only to watch helplessly as their money disappeared.
"A limited number of customers appear to have their Robinhood account targeted by cybercriminals because their personal email account (which is linked to their Robinhood account) has been compromised outside of Robinhood," a company spokesman said in an E. -Mail. "We are actively working with those affected to secure their accounts."
The problem was not due to a violation of Robinhood's systems, the spokesman said.
Bagheri, a Washington attorney, and three other Robinhood users said they also reached out to agencies like the Securities and Exchange Commission and the Financial Industry Regulatory Authority. Two of these customers said they had feedback from an SEC official asking for more information.
Finra and the SEC declined to comment.
Robinhood was founded seven years ago and is based in Menlo Park, California. This year, popularity has skyrocketed as millions of home-stuck Americans - including many millennials - try to make money during a pandemic that has rocketed stock prices. However, the free brokerage app has also generated complaints from consumers. Beginners are confused about the vagueness of stock options and margin loans.
Although the company said it more than doubled its customer service team this year, customers complain they struggle to get quick help when their funds go missing.
"They don't have a customer service line, which I'm pretty shocked about," said Bagheri.
Pruthvi Rao, a software engineer from Chicago, said his account was closed on October 6th. His bet on Netflix Inc. was liquidated and $ 2,850 was soon withdrawn. He said he sent more than a dozen emails to Robinhood's customer service address and even tried to message some of the broker's executives on LinkedIn.
"I'm in tremendous mental stress right now because these are all my savings," said Rao, 36, whose account was frozen by Robinhood in response to the fraudulent activity. He said Robinhood contacted him on Friday and unlocked the account after sending multiple emails late Thursday asking for help.
Rao showed Bloomberg the same email response from Robinhood that Bagheri had received. "We understand the sensitivity of your situation and will refer the matter to our fraud investigation team," wrote Robinhood's customer service representatives. "Please note that this process can take a few weeks and the team working on your case cannot provide constant updates."
Rao said he previously set up two-factor authentication to access his account, and Bagheri said she was sure that her Robinhood password was unique from everyone else, including her email address. No one believed they had been scammed by phishing scams or malware. Both said that they use the same email for Robinhood and other accounts and that only Robinhood is affected.
"Unfortunately, it is common for cybercriminals to buy, sell, and trade online accounts for money," said Mark Arena, CEO of Intel 471, which oversees the activities of digital criminals. "This shows how important it is for people to practice common information security hygiene, such as not reusing the same password for multiple accounts and enabling Robinhood-supported two-factor authentication."
They also said Robinhood's online portal showed that their money went to a recipient at Revolut, another popular financial technology startup. London-based Revolut, which offers a money transfer and currency exchange app, expanded to the US earlier this year.
"Revolut has been made aware of the problem and is urgently investigating it," a company spokesman said in an email on Friday.
Bill Hurley, who owns a metal factory in Windsor, Connecticut, said he had received notifications that his account had sold stocks and bitcoin on September 21, and that $ 5,000 had been transferred to Revolut accounts in two transactions. He said he emailed Robinhood for assistance while the transactions were pending but not received.
"You had more than enough time to look at it," he said.
Hurley, 56, said he reached out to the SEC and heard from a regulatory attorney who asked for additional information about what had happened.
After more than two weeks of emails asking Robinhood for help, a customer service rep called him Thursday, he said.
(Updates with comment from a cyber security expert in paragraph 15. An earlier version of this story corrected Rao's age.)
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