They tried to immediately seek help from Robinhood but were left in the dark— in one case a person’s life savings disappeared. The company does not have dedicated customer service to address critical problems—according to five Robinhood users who recounted their troubling experiences to Bloomberg News.
Robinhood exploded in popularity during the COVID-19 pandemic as millions of young traders flock to the online trading app in the hope that they will be able to make a quick buck without having to deal with the intricacies of traditional trading.
With that popularity comes increased chances of fraud. Pruthvi Rao, a software engineer based in Chicago said the end result was losing his life’s savings. Rao made a $2,850 bet on Netflix, which all of a sudden was liquidated and withdrawn. “I’m in tremendous mental stress right now because this is all of my savings,” he said.
He immediately attempted to contact Robinhood’s customer address, sending a flurry of emails late Thursday. Rao even went as far as contacting the company’s executive team on LinkedIn. It wasn’t until Friday that Robinhood finally responded and unfroze Rao’s account.
The reply given to Rao is reportedly the same as what other fraud victims have received:
“We understand the sensitivity of your situation and will be escalating the matter to our fraud investigations team. Please be aware that this process may take a few weeks, and the team working on your case won’t be able to provide constant updates.”
Robinhood app security is questionable
Rao made it clear that he had a unique password and two-factor authentication on his Robinhood account. It appears it made zero difference.
In some cases, individuals have reached out to the Securities and Exchange Commission (SEC) for assistance after feeling as if they’ve been left in the cold.
“Unfortunately, it’s a common occurrence that online accounts of monetary value are bought, sold, and traded by cybercriminals,” said Mark Arena, CEO of Intel 471.
The incidents raise questions of how secure the online trading app really is. It is also highly likely that Robinhood will face class-action lawsuits and regulatory investigations related to this hacking incident. The company is already facing a class-action lawsuit over the multiple outages of its online trading app and website in March.
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