Cautionary tale on using Chase bank for indie business

Similar experience: Citibank Retirement.

I had about $80,000 in IRA/CD's. I'd created & contributed to them over a period of 35 years.

Last year, it's time to retire, and Citibank won't give me half the money. It seems that some CD's are for "Cliff Stoll" and some for "Clifford Stoll".

Citibank Retirement demanded a "Marriage Certificate, Divorce Decree, or Court Order" to demonstrate that "Cliff Stoll" is the same person as "Clifford Stoll".

Took more than 8 months, dozens of emails, five visits to Citibank offices, and a letter to the Citibank president, to shake loose money that I'd deposited across three decades.

About 10 years ago a startup I co-founded had about $3M in a Chase account. We received a notification that they were closing our account within 30 days. We weren't able to get any information but I assume this was a KYC false positive. The only thing I can think of is that we had some investors from the Middle East. We had no problem withdrawing our funds but since then, I've opened another business account and a personal travel credit card with Chase, both of which were shut down within weeks, so apparently I'm personally flagged for life.

The most important lesson learned here is not to ever deal with retail banking at the branch. Not only do they not care they aren’t given the authority or autonomy to help you.

By trying to do this at multiple branches across the country OP likely made the problem worse as those actions raise suspicions even more.

With that much money after the first day of inaction by support he should have CC’d every department from legal@ to the C-suite.

Crypto solves this. Well, eventually, after initially making it worse, because all your crypto-adjacent transactions in the meantime make legacy banks extra-hair-trigger suspicious.

I know that it's an extra expense, but shouldn't you get a lawyer involved first thing?

This is why Bitcoin is ideal. You can hold and transfer any amount, any time of day, without fear of surprises like this.

Would I use it as a primary cash account for my business today? No, because of the obvious exchange rate/price swings. But long-term, moving toward Bitcoin as a settlement layer (i.e., a modern SWIFT) would solve a ton of problems and avoid situations like this. The more people that do that/normalize it, the more stable the price in other currencies, too.

I get that people like to hate on it because it's not a perfect solution to everything, but in a hostile unpredictable environment, it's a life saver.

Stupid question from outside the anglosphere: what's the difference between a bank and a credit union?

Another story about a startup and chase, from the person who founded hashicorp, it's a fun read:

https://mitchellh.com/writing/my-startup-banking-story

(edited since at first I remembered it being more negative about chase in particular -- but it's really just funny!)

I have been burned by a bank (stagecoach in red field) very similarly.

I now only do my financial transactions with smallish credit unions. Big enough that they can have the services I need, but small enough that my business is a large-ish part of the Unions' business.

This works internationally, not just US or Europe. Most nations have some sort of a member-owned financial cooperatives, equivalent to credit unions.

I feel bad for the people who went through this Kafkaesque nightmare.

After months of back-and-forth, [...] I finally got my money.

I didn't find any mention of a lawyer in the article.

When you realize you're dealing with people who aren't operating in good faith, seriously consider consulting a lawyer.

(A harder problem is realizing when people aren't operating in good faith. Especially if you're a Pollyanna, or decent folk dropped into the big city.)

consider using my referral link to open an account with Mercury

I'm not going to click a kickback link on a piece like this, and I'm going to disregard the recommendation.

If the goal is to warn people away from something, or to make a positive recommendation for something else, why add an obvious conflict of interest that didn't have to be there?

Diversifying in many cases won't help you.

If a bank suspects fraud, they can tell other banks about their suspicion, which will cause all banks to freeze your accounts and none will be able to tell you why.

Consider also that you probably could not sue your Bank if you wanted to. All the small print you agreed to.

This was brought to my awareness due to the recent news about how somebody could not sue Disney because they had opened a Disney+ streaming account.

We need financial reform customer protections. Let us hope the party that fights for big businesses and billionaires does not win in the next election.

When I first moved to the SF Bay it tickled me to find there was no retail Chase Bank presence at all.

Then the financial collapse and bailouts happened, Chase scooped up WaMu, and now Chase is everywhere here. :sadpanda:

I won't even take money from their ATMs if I can avoid it, my bank covers ATM fees, but f*ck giving that company another dime.

I've never used JP Morgan or Chase, but I recently inherited some stock. There was no way to transfer the stock in-kind to another brokerage, for some reason it needed to go from a JP Morgan account to another JP Morgan account. (I didn't want to cash the stock out immediately because I couldn't get info on the basis and what the capital gains taxes would be).

Anyway, sibling knew someone who worked at JP Morgan private bank and they were willing to do all the work so I said "sure".

Turns out Chase and JP Morgan are integrated on the backend but not Private bank. So the transfer couldn't go through.All in all this was 15-20 emails and multiple phone calls.

And then I was told to open a Chase individual investment account instead.

Not wanting to continue to burn time during work hours when I was super busy with a project, I drove 20 minutes to a Chase branch to open an account with an investment banker to make sure all went smoothly (instead of doing it online).

He couldn't open the account for me, couldn't get anyone on the phone, either. Turns out that the backend is connected enough with Private Bank that I had a profile in their system, but he couldn't "do" anything with it.

A few more emails and phone calls and the Chase investment banker sent me a link to open an account online. So I do that and let the banker that controlled the original stock account know the account details. But he still couldn't transfer the stock. That private bank profile still causing problems I guess.

I was given an 800 number to call private bank to get them to close the account. I spent about a half hour on hold before I hung up. I then contacted the banker I knew at Private Bank and informed him, he said he'd take care of it. Later that day he emailed me and said he had put in the order and I would get a confirmation.

I did get the confirmation but was informed it would take a few days. Once that was done I contacted the broker that controlled the stock account. He tried again, no dice.

He then decided to get licensed in my state so that he could create the account for me. That took another week or so.

And, I was told to close the Chase account. I did that, again, a couple days. By this time I'm 20-25 hours in with phone calls, emails, conversations with my siblings, have driven into the city twice, and so on.

Finally, after about an hour on the phone the next week, the broker creates my account and is able to execute the transfer. Of course, by this time the stock market had tanked and the stock had lost ~20% of its value, meaning I netted less than my siblings, and spent a ton of time.

What. A. Circus.

Everyone wants to open their first bank account in one of the big banks, I was one of those. Later I found out that not-so-famous big/small banks are far superior for SMBs.

Revolut, Mercury, Meow and Payoneer (Personally using myself) are all leading online businesses.

I used to have a side gig as the CFO for a not-for-profit (an unpaid volunteer). Anyway, this organization was over 125 years old, associated with a larger organization 80 years older than that, and had the same primary bank for 70 years ... Anyway, my treasurer, who was very smart, insisted we keep enough cash to run for 3 months in a secondary bank. Just in case we were locked out of our primary bank.

I feel like these sort of corner cases likely can happen with any bank.

The real question is: why did it take months of having their vital money withheld before trying to go around the bottom rung support that was clearly not going to help? By like week 2 I’d be talking to an attorney and I bet a letter from them would get it cleared up fast. (Perhaps I’m wrong though.)

Mercury is a fintech company, not an FDIC-insured bank

Funny enough, I recently opened a Chase business checking because of this "bank not bank" news: https://news.ycombinator.com/item?id=40480159

I still have a different business checking with a Mercury-like fintech provider. Chase freezes accounts, Fintech startups go under.

Chase already froze my business credit card once. I had to send them a deed of a house that I had already sold. It made little sense.

On the fintech bank side, my biggest client cannot make transfers to that account. Their payment system throws an error when they try to ACH to it. That plus the news about Synapse going under made me want a chase.

So I don't really know what to do. I now have multiple business accounts, multiple personal accounts. I want to find like a good credit union maybe?

What's clear is being in small business requires building tolerance for money uncertainty that wasn't as necessary when I was an employee.

I feel for the author. That all sucks. I enjoyed the 'Yuppie Nightmare' reference. Many thanks for sharing.

Chase stole about $900 from me from an account I setup just for freelance income. This was during the pandemic when I had to take a 2/3 haircut in my day job to keep the company afloat (we did, and all is well now). Every time I'd try to reach out to try to get answers, I'd get bounced around among different foreign call centers. After months of trying to resolve it I just gave up. (I could and should seek legal recourse, but I just didn't have the emotional energy for it at the time)

I will never do business with them again, even though their many branches (literally have one across the street from my office) would make it convenient.

Reading anecdotes like this is just so terrifying, and there appears to be absolutely no recourse.

These stories can, and do, happen to anyone at any bank. And what can we do about it? It seems like the answer is a glib 'nothing'.

The real question here for the author is: What are the three banks that you now use? We use high availability and redundancy for everything else, why not business?

Maybe it was SARs?

In the specific case of “Why did the bank close my account, seemingly for no reason? Why will no one tell me anything about this? Why will no one take responsibility?”, the answer is frequently that the bank is following the law. As we’ve discussed previously, banks will frequently make the “independent” “commercial decision” to “exit the relationship” with a particular customer after that customer has had multiple Suspicious Activity Reports filed. SARs can (and sometimes must!) be filed for innocuous reasons and do not necessarily imply any sort of wrongdoing.

SARs are secret, by regulation. See 12 CFR § 21.11(k)(1) from the Office of Comptroller of the Currency:

No national bank, and no director, officer, employee, or agent of a national bank, shall disclose a SAR or any information that would reveal the existence of a SAR. Any national bank, and any director, officer, employee, or agent of any national bank that is subpoenaed or otherwise requested to disclose a SAR, or any information that would reveal the existence of a SAR, shall decline to produce the SAR or such information, citing this section and 31 U.S.C. 5318(g)(2)(A)(i)...

https://www.bitsaboutmoney.com/archive/seeing-like-a-bank/

Knew this had to be Jason. Poor guy has been put through the ringer. Running into a new update on twitter has me like, "How is this still going on?".

At a certain point in this story, it felt like time to file the lawsuit. They basically stole the money and wouldn't give it back to the owner.

Glad you got your money back Jason!

Not often you get to read a post from the future, either ;) "posted on 2024/09/21"

I had a similar experience with US Bank. Business account, over $50k lost; they said that they can 'terminate their relationship with me at any time for any or no reason whatsoever,' and didn't have to return the money.

The Fraud and Trust VP seemed shocked when I mentioned to her that it wasn't a big deal for me, and that I had my personal accounts with a credit union.

It's been 4+ years. I've written the money off.

my story with them: Chase bank refused to cash their own Chase cashiers check. Seems crazy but I had to get a lawyer involved.

Blog post dated a month from now? “2024/9/21”. Not exactly helping me believe your story.

Complains about big banking. Hawks a referral code for a non-FDIC insured “bank”.

Some people never learn, I guess?

"Computer says no" is the one customer support response that makes me move my business elsewhere.

good ole “anti-money laundering” (AML) system false positives. Generate too many of these and the risk departments can unilaterally close the accounts.

If you ever needed a reason for a decentralized finance, this is among the top reasons.

Title is different?

Should be: Chasing Chase: Why I'll Never Trust Chase Bank Again, A Yuppie Nightmare

I went with someone from my family to close a bank account. The bank teller received an error message that said something like "please visit the bank personally". It was a message on her computer.

Is that on the shitty bank rules, or shitty software? After 2 hours and the bank stuff calling some helpdesk they managed to do it.

Mercury back isn’t a solution. They closed my account the first week it was opened. I didn’t need an extra bank account but I wanted to open 2-3 at the time and did so without any other issue at the different banks I chose.

I’ve used chase and other big banks to nonissue outside Zelle crap.

So I’ll wait to see the same thing with mercury. But my experience with them sucked and whenever someone Hails they were their savior I will post my experience.

Mercury bank sucks, etc.

Business or Personal, do not ever rely on a single bank. Ever. Have a backup, ideally far enough from your "main" bank that any issue doesn't bleed over.

I followed the saga as Jason was going through this. You may not have the same sway as large entities if you are an indie dev.

In 2008 Capital One did the same thing to me. It almost destroyed not only my business but also the rest of my life. They were completely unwilling to work with me and they said that they suspected fraud. There was no fraud, I proved there was no fraud, they still kept my account locked for over 30 days.

Yeah no one tells you when you start your business that your own bank is preying on you.

Sadly, also happens with smaller banks that cater to startups. Happened to us with https://www.grasshopper.bank

Diversify your banking. Every individual and business shoudl ahve at least two completely unrelated banks. I actualy reccomend one be a credit union. Ift gives you a fall back position to protect against this kind of situation.

I've had issues with both my personal and business accounts at Chase. Mostly due to the inept local branch manager. I've also had deposits flagged and delayed from clients that have been paying me for years with never an issue previously.

I'd love to switch to a new bank. Any recommendations?

Is it possible to use a european bank with eId totp physical chip with fallback to passport scan?

Grim story.

Apparently banks can be tough to work with for obscure reasons.

Own little case:

While in NYS (US, New York State), did personal banking with, false name, XYZ Bank. Somehow I was assigned to a particular branch office of XYZ in NYS.

Moved to TN (Tennessee). Eventually ran out of paper checks, so ordered a new supply. The account was "joint" with my wife; thus, her name was also printed on the checks. Since my wife had been dead for 20+ years, I guessed (first mistake) that it would be more appropriate to have her name removed from the new batch of checks I was ordering.

Did get the new checks and used a few (mostly I don't pay with paper checks).

Then got some communications from "my" branch office of XYZ bank in NYS that I should come to the branch office and sign my name to show that I am the real owner or whatever of the account.

Apparently due to the new checks without my wife's name, someone at XYZ Bank was afraid that I was doing something nasty to my wife, to separate her from our joint money, etc.

Soooo, they wanted me to drive from TN to NYS for WHAT THE F????

So, I called and got sent to "my" XYZ Bank branch office in NYS.

On the phone to that office I explained:

"My wife died 20+ years ago. You are welcome to drive to Indiana, to the little town of Warsaw, take the main road south out of town, drive about 15 miles, turn left, east, to the little village of Claypool. There you will find a school and a church. The church has a graveyard. There you will find the tombstone of my wife ....

For my signature, you already have hundreds of copies of that. I will NOT drive to NYS. For more I will gladly talk to you. But I will not talk to lawyers. If you involve a lawyer, then I will immediately close out my account. If you want, I'll order a new batch of checks that again has my wife's name printed on the checks."

That worked. Otherwise I like XYZ Bank a lot. But, since XYZ Bank has no branch office near me in Tennessee, really I should get an account with a bank with an office where I live. Actually, while in NYS, I did open a "business" account at a branch of Chase. It was a small branch, small office, no Greek columns, just a few nice women, trying to be a local bank, for businesses, yes, but also for consumers. Likely gave them the form I'd just gotten from NYS "Doing business as". Checking, Chase does have a small branch where I live. And I have a small balance in that account.

Hmm. Sounds like anyone with a SMB (small, medium business) should have more bank accounts, not fewer!!! Sounds like, before my business starts getting revenue, I should get an account at a local bank where I can be known in person and use that as my main business bank.

Also lesson: Banks are legalistic, have too many rules, have low common sense, like lawyers too much, can be simplistic close to brain-dead, tend to be paranoid, and can generate expensive legal problems. Go slow on crypto, more than the necessary one LLC (limited liability company), etc.

Addendum:

For this discussion about banking, we all should understand at least a little about financial institutions

SMB -- Small Medium Business

KYC -- Know Your Customer

SAR -- Suspicious Activity Reports

BSA -- Bank Secrecy Act

I got a letter from Citibank demanding I prove my business was legit. I sent them a "secure message"(on their online site) containing the documents. But(according to them) they could not open those secure documents. They called me and asked for the password for that secure message. That was of course a red flag so I went to the local branch and asked them to send those documents to whoever it was that was requesting them.

Going to the local branch stopped them from sending any more demands for documents so it seems it really was Citibank who had sent those demands to me. But for them to ask for my password in a phone conversation is a huge Red Flag right? And they never sent me a confirmation that issue was resolved.

I should have reported them for asking for my password, but did not know where should I submit such a report.

Big banks are too big.

I feel bad for you and not a fan of Chase’s behavior here but I would never open a business banking account in a country different from the one I’m living in unless I had an extremely good reason (like a statutory requirement). Particularly if I hadn’t fully secured permission to be in that country.

Even then, if I was going to do it I would want to be sitting physically across from a bank officer to make it happen, not online. I opened business checking from BofA online years ago and it was a total nightmare even living a short walk from the branch, being a US citizen, etc. They did freeze it once or twice. Never again.

Step 1. Think "this is probably fine"

Step 2. Find out it's actually a fucking nightmare

Step 3. Finally stop thinking everyone who worries about obstacles you assume don't happen are tinfoil hat weirdos.

It's always step 3 that gets people.

Strong recommend on using meow.com. You can get interest on your primary checking account, and easy access to high yield treasury management services.

I’ve been following the Evolve Bank fallout on the FinTech Weekly newsletter, and the whole situation scares me about Mercury. I used to bank with them, but the sanctions by the Federal Reserve and the continued disclosures about lacking KYC and money laundering controls has me worried there are other problems.

fun following this debacle on twitter

By day 2 I'd have filed a lawsuit seeking over $5-million in combined actual and punitive damages. You have to speak the language they understand, anything else is a waste of time.

I went to Chase Bank to withdraw cash for a Facebook deal, and they refused because I didn’t have their app. The teller couldn’t verify my driver's license or passport, insisting the only way was through their app's 2FA. This is exactly why I stick with credit unions—where I can work with real humans who actually help.

Obligatory reference to patio11's write up on banks: https://www.bitsaboutmoney.com/archive/seeing-like-a-bank/

Let me explain this to those who are not familiar with the American system of kleptocracy: Banks freeze account to steal the money, not because they suspect wrongdoing. The protagonist in the article finally showed Chase it would be more expensive to keep the money than to give it back, so they gave it back.

When I read these kinds of stories, and the comments on them, I feel it would vastly more useful for people to document positive interactions with financial services.

Am I shilling for banks? I hope not. It just seems that at this point anyone who imagines the banks are going to work for you, the customer, has not been paying attention and/or is delusional.

Finding out that SolarFlower Bank in Hometown, Your State has provided exceptional banking services is massively more useful than hearing, once again that BigBankCorp are terrible.

I think this situation, while extremely unfortunate, is just the natural consequences of how banks are regulated in the US. The big banks face a constant threat by the government: if your customer does something illegal with your product, YOU will be fined millions of dollars. Therefore, if your activities have any resemblance of money laundering, they'd rather lose your business than lose millions. Different banks have different "sensitivity", and Chase, unfortunately, is one of the more sensitive ones.

What are the solutions? Laws should be passed to protect customers' rights in the event of an account closure; banks should probably be provided some safe harbor so they aren't as skittish; and in the meantime, bank with a smaller credit union that have a smaller target on their back, and also if something breaks you can yell at someone who can actually fix it.

I know someone who had an almost identical experience with CIBC in Canada: accounts (including payroll) completely frozen, nobody to contact, nobody who can help. Never found out the reason, either.

Always have your money split between multiple unrelated banks in different jusrisdictions.

Always have multiple debit and credit cards between different institutions.

If possible avoid the USA banking system, although thats easier said than done if you live there.

These are good practices for both professional, company and personal finances.