Complain about a product or service

Charles Schwab & Co.

101 Montgomery Street, San Francisco, CA

Karen of San Diego writes (7/10/03):
We just wanted to let you all know that although we had been Schwab customers for over a decade and had several hundred thousand dollars in our accounts, shortly after we complained about a customer service problem and responded adversely to one of their telephone surveys, Schwab unilaterally terminated our accounts giving us less than 45 days to transfer all our money and stating that if we didn't they would liquidate the accounts and charge us fees for the liquidation.

As you might expect the tax consequences of this would have been substantial particularly since one of the accounts was a retirement account. We contacted the Executive Offices but they refused to help us or provide us with the information they have about us or our accounts. The only justification they gave is that we were unhappy with Schwab's service.

Apparently, Schwab reserves the right to unilaterally terminate accounts at any time in their account agreements. Please note that this all occurred over the Holiday season so you can imagine how much difficult it was to complete this in the time allotted. Thankfully, Fidelity was extremely helpful with the transfer. To literally add insult to injury, Schwab charged us termination fees for closing our accounts.

Brad of Watchung NJ (7/6/03):
Charles Schwab Bank provided me verbal and written confirmation 5 days prior to the closing on my house that I had a rate-locked at 5.228% with 3/8th lender credit. One-day prior to closing Schwab e-mailed me to say that the rate changed to 5.46% with zero points - a huge difference! Given I had rate locked & had it in writing, the rate should not have changed at all.

Damage: Loss of $1200 upfront lender credit. Increase of $44 a month in my monthly mortgage payment.

Kevin of Dayton OH (10/26/02):
Charles Schwab introduced a new fee structure 6/30/2002 that raised account limits to avoid fees. I chose to transfer my balances to another brokerage and close my accounts to avoid these predatory fees. Schwab charged me $60 per account to transfer the assets of two IRAs and one brokerage account to Fidelity. Schwab further reduced the value of my assets by $180, making it impossible to avoid their onerous fees.

Douglas of Ventura CA (6/6/00):
On March, 21, 2000 I completed a Roth IRA application at the Oxnard, CA branch of Charles Schwab to open an account. I also completed a transfer request and supplied a copy of my last fund statement to move my Roth IRA with 5,407.910 shares in the Matthew's Korea Fund (MAKOX) over so I could easily sell the shares and invest the funds in other items.

Kathleen at the Oxnard, CA branch took this paperwork and sent me a confirmatory letter stating that the transfer request had (in theory) been sent on to the transfer department. Three weeks after I opened the Roth IRA, April 11, 2000, and after the transfer should have been completed the Korean market had a nice but short upturn and I decided it was time to sell all shares in the fund. On April 12, 2000 I sent in an order for my trust account to sell all MAKOX. However, I could not sell the shares in my Roth IRA because the transfer had not been completed.

The following day I called Charles Schwab to see when they had sent out the transfer request and learned there was no record of the transfer request ever making it to the transfer office. In other works they lost it. I called the Matthew's Fund Company again to see if they had a money market fund I could park the money in temporally, but they did not offer any such fund. The fund shares were posted to my account on April 28, 2000 when I sold the total drop in value based on the April 12, 2000 price of $5.50 for MAKOX was $2,812.00=[(6.02-5.50)X5407.910].

I was able to purchase 19000 shares of Thai Farmer's Bank-F shares at about 0.9% less [($1.06-1.05)X19000]=190 due to this delay Charles Schwab's loss of my first transfer request has caused my Roth IRA to lose a net of about $2622.00 in value ($2,812-$190) from the date I wished to sell it.

This highly negligent mistake was clearly the fault of Charles Schwab yet they refuse to credit my account for the amount lost. I find this especially shocking because of the amount of business I have given them and the amount of total assets on deposit with them. Seems to me only a fool would be willing to lose my amount of business over that amount of money.

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