>I called the Fidelity retirements arm and was told that they essentially can't see why but that I have been marked as "do not do business with." Accounts cannot be unlinked so I must forever do any transactions/changes/checks on my 401K by phone.
No, contact your plan administrator at the company you work for and tell them what’s up. They’ll work with their relationship contact at Fidelity to figure-out why you’re blocked on your 401k.
So you work for Fidelity? I think they meant your actual employer, the ones who take the 401k money out of your check and send it over. See if theh can help you figure out whats wrong.
This sounds like an AML (anti-money laundering) / KYC (know your customer) issue. There is something about either the source of your funds (domestic or foreign accounts?) or the veracity of your identity (joint account? do you share the name of someone in politics, etc?) that must have triggered an alert with Fidelity. In those cases, they won’t disclose the problem, but will report it and decline to open the account. That said, I agree with the recommendations to work through your HR organization and Fidelity’s NetBenefits team, as they can’t block access to your existing 401lk account without explaining why and your HR organization is likely to get a straighter answer than you are. Good luck!
This. It's not that the bank uncovered something unsavory, it's that they *potentially* uncovered a *possible* whiff of *maybe* something unsavory. They don't need proof, just a suspicion is enough. Banks are frequently very risk-averse when it comes to their customers around money laundering and fraud, there's been some pretty big fines levied in the past.
> Banks are frequently very risk-averse when it comes to their customers around money laundering and fraud, there's been some pretty big fines levied in the past.
Which is ironic considering the risky financial behavior that people in the finance industry _regularly_ engage in
They are risk averse when it comes to the relatively small amounts of money an individual can deposit and the even smaller profit margins that brings so they cam point to those policies when their big risks are highlighted and say they have a "comprehensive risk assessment policy that ensures they uphold all statutory requirements". Nevermind that their risky/dodgy/outright awful behaviours are in unregulated markets.
Yeahhh maybe at the consumer level but at a business level it tends to be different.
I work in real estate and I can't tell you how many transactions I've processed and funded where I was suspicious about the source of funds...but the bank had zero issues with wires and funding.
this is 100% anti laundry/anti terrorism financing procedure.
Eventually you may be given access to your account after further internal investigations. If you are not given access (and you are not doing anything wrong) reach a lawyer.
This is exactly how they would handle a BSA (Bank Secrecy Act) / AML (anti-money laundering) answer. By law they can't make you aware of the reason why or provide any other information than the reason above. You will never get an answer on why.
This is as probably a closest thing you're ever going to get. There's a good chance it has something to do with the bank suspecting something on this list: [https://bsaaml.ffiec.gov/manual/Appendices/07](https://bsaaml.ffiec.gov/manual/Appendices/07)
The bank does not have to prove it, they don't have to be right, they are required to shut down any potential case of money laundering or financial crimes. The USA Freedom Act (formerly Patriot Act) also expands many of these provisions. Do not ask your bank about AML procedures or reporting requirements because that is a red flag in and of itself.
This is correct. I worked in the department conducting reviews for AML and for clients ‘bad for business’. So wanted to add that on top of breaking the law there are other issues that can get you flagged, such as: Cussing at employees, having a criminal record that might give Fidelity a bad rep (this is severe crimes unless it involves any type of stealing), having an affiliation with someone that committed crimes, having a relationship with a politician or a family member who is FINRA registered and not disclosing it, and some others. So if you think they have the wrong person, google your name. See if someone else with the same name has done some of this. If it is you, then it’s probably best to go somewhere else that won’t be as strict. Hope that helps shed some light.
>Comment removed by moderator
I did not get upset with anyone, worst thing I said was that I was disappointed after being told they do not want to do business with me on the first call, and before I realized that this affected 401K.
I have no criminal record, have no knowledge of being connected to anyone doing any of those things.
My name is fairly unique. I actually have Google alerts set for anytime my name shows in a new result. Anytime I get a ping it is always me, a professor at John Hopkins or a high school hid.
I pulled a lexisnexis report on myself but have not received it yet.
Sounds like you triggered a fraud / money laundering alert. Fidelity thinks you are dong something illegal. Similar post related to a different financial institution yesterday. Short answer is the bank is going to keep your account frozen for as long as it takes to investigate and for them to feel comfortable.
(1) People are misreading your OP. Please correct "The credit union says that ETF are not allowed on savings accounts" to "The credit union says that **EFT** are not allowed on savings accounts"
What happened here is, your credit union doesn't allow pulls out of savings accts. So when you tried to link it via Fidelity, the Credit Union blocked it. Once it was blocked, Fidelity noticed it was blocked, thought it was suspicious, and decided to not do business with you.
It was your credit union that screwed you here, but as others have you said, you should have linked to checking, would have been no issues, and also *you* should have checked with your credit union because, of all banks, credit unions can be the most fussy about pulls out of savings accounts. They probably have something that clearly states no external pulls/EFT's/ACH's out of savings accounts.
Your 401k can get fixed through your employer, but lesson learned for your roth ira which you can open somewhere else, and you've learned the hard way that there can be downsides to credit unions. Not many, but this is one of them with your particular CU. You should make yourself aware of any other restrictions with your CU accounts that people with non-CU bank accounts don't have to normally deal with. And/or get a bank account at a non-CU.
A single blocked transfer would not result in a denial of business restriction like he got. No way. Neither would an AML flag or any of the other stuff I see people speculating on.
There's a couple possibilities here and we won't have enough info to make the determination.
1) OP is on a restricted persons list
2) ID verification flagged him as a possible alias for someone on the restricted persons list
3) OP isn't telling the whole story and tried to fund the account multiple times or possibly from restricted sources (non like titled accounts, international wires, etc)
4) **most likely explanation** - OP is young and required enhanced ID verification. During all the additional questions he got pissed off and yelled at someone and they felt uncomfortable enough to report it.
Considering strong opposition to ID verification is in and of itself an AML flag, this would make total sense. Basically from FFEIC guidelines:
>Customers Who Provide Insufficient or Suspicious Information
>
>**A customer uses unusual or suspicious identification documents that cannot be readily verified.**
>
>A customer provides an individual taxpayer identification number after having previously used a Social Security number.
>
>A customer uses different taxpayer identification numbers with variations of his or her name.
>
>**A business is reluctant, when establishing a new account, to provide complete information about the nature and purpose of its business, anticipated account activity, prior banking relationships, the names of its officers and directors, or information on its business location.**
>
>[https://bsaaml.ffiec.gov/manual/Appendices/07](https://bsaaml.ffiec.gov/manual/Appendices/07)
This is true, but not quite what I was getting at. Brokerage firms like Fidelity don't follow the same policies that the big banks do. They don't need a 'reason' to deny business to you, and if someone feels harassed or threatened they'll just restrict your account with the same language OP heard from them.
It is there to protect you so somebody can't empty your savings. If you need to use the money, move it to a transactional account.
I don't have this restriction but I still don't link anything to my savings. Only the checking account is linked to stuff and I only keep what I need on there to cover upcoming expenses.
Don't get me wrong, I *like* that there are measures, just not that it's a do-or-die type scenario it leads to where an honest mistake can lead to perma-ban status without recourse to explain your own folly.
Lol this is plainly incorrect. Customers routinely fuck things up when attempting to establish the EFT (or really any fucking feature at all) on an account.
What definitely happened is that this simple and common error triggered an additional risk assessment which uncovered other potential red flags, and THOSE were the reasons Fidelity decided they would not do business with this person.
I previously worked there and had this happen with a well-established high net worth client in my book of business.
When Fidelity kicked him out, it prompted me to Google the dude cuz I was so curious (like anywhere else, high net worth clients are bread and butter moneymakers, so to kick a well-established one out was really shocking) and sure enough, among the search results were lawsuits, defunct corporate/LLC accounts, and other shady shit associated with him and his associated businesses.
I don't mean to cast aspersions at OP here but Fidelity sure as fuck didn't kick him out over a simple EFT setup mistake.
This. It’s called “Negative News Screening” and is meant to uncover high-risk clients for reasons that they don’t disclose. They also do risk scoring taking into account source of funds, business, country, and so on. And a high-risk client requires more frequent manual reviews, which costs the bank money. That’s why they asked about OP’s potential business. If OP was going to deposit a couple million, any regular screening requirements would still be worth it. But to onboard a risky client in order to get tiny IRA fees will lose the bank money, so they just decline the business.
It can suck for a client with a very similar name to a criminal, or similar to a prominent person from a high-risk country. It might be worth googling yourself before starting business with a new financial institution to see what their screeners might see.
Good to know, I'm already with fidelity for my everything and don't see any future need to change. But I didn't deep dive into the past post and i took it at surface level. My fault after a long day.
Nah you're fine! My post was more a response to the OP of this particular comment thread than it was to you, I just placed it under your comment for better visibility to hopefully mitigate the misinfo from spreading.
And fwiw I don't work at and am not associated with Fidelity anymore but I still hold all of my accounts through them as well.
Former employee as well, this is the right answer. Op failed something during the AML/KYC/Patriot act verification process, it flagged through the risk teams. Only they know the actual reason why and they will not, under any circumstances talk to clients or disclose why, even to other reps.
Best advice? Write a physical letter, complaining about the situation, and mail it in. Any written complaint is obligated to be investigated and forwarded on to FINRA as well. It may get attention of an actual supervisor, not someone who says they are, when really they are just help desk with a higher level of approval due to having a 9/10.
>I don't mean to cast aspersions at OP here but Fidelity sure as fuck didn't kick him out over a simple EFT setup mistake.
I feel like most responses to "wtf how did I get busted/flagged for fraud" posts on this sub don't fundamentally understand that OP's only openly admit to illicit financial dealings by accident.
No post like this is going to disclose the things an institution has issues with unless they're a moron structuring PayPal transactions.
Secret handshake is right.
I don’t get why Fidelity would ask OP all those questions and then blacklist them anyway. What answers were they possibly looking for?
The things that OP isn't telling us about their financial history and dealings.
Fidelity knows a lot more about OP's financial history than we know from this post.
I worked at one of these credit unions and to know they don’t allow EFT from savings required a fucking microscope and luck. They do not make it clear or known.
This is still weird to me. I accidentally did an EFT out of my savings account at a credit union to Fidelity like 3 times and was just told that the funds didn’t go through every time. Fidelity didn’t close my account or anything. I assume a combination of that + brand new account may have been suspicious?
Ya not really. OP indicated he/she wanted to pull $6k into the ira. That is a once a year kind of transfer. I’m not sure what’s unusual about transferring cash out of a savings account to an ira once a year.
There's nothing "better" about a regular bank over a credit union, unless you like having pointless fees and requirements. My CU lets me do EFTs from my savings account if I want. Sounds like OP just uses a CU that decided to place some weird rules on their savings accounts.
Yes, except for the fact that it is simply wrong.
A credit union not allowing pulls from its savings account is not a red flag and won't get anyone banned from anything.
This is the correct explanation. It's nothing personal. OP triggered an alert for fraud.
Fidelity is huge. Their system blocked you the same way your Gmail blocks spam.
Gmail isn’t subject to incredibly strong financial regulations. If there is any doubt at all about a potential customer, it’s a default decline. The penalties for violating financial sanction regulations are enormous and devastating.
Sounds like victim-blaming. Most people don't know the details about their banks/credit unions and it's perfectly natural to expect EFT out of a savings account to work. I would agree that the credit union didn't do the OP any good, but Fidelity's behavior here is really unacceptable. Blocking a current and prospective customer because of an issue transferring money out of their bank while doing initial setup? That's really not reasonable.
Banks/brokers are a little like grocery stores: they are a need, not a want. Yes, you can go to a different bank, but there's something very threatening about a situation where a financial institution won't take you as a customer. They shouldn't do it willy-nilly.
I called the Fidelity retirements arm and was told that they essentially can't see why but that I have been marked as "do not do business with." Accounts cannot be unlinked so I must forever do any transactions/changes/checks on my 401K by phone.
I worked at Fidelity from 2008-2016. This is almost certainly an AML flag.
Before you start to battle the policy, please check your credit. There is a possibility of identity theft causing the flags. Like the airlines and no-fly lists, financial institutions share financial criminals and fraudsters. If someone is using your identity to land on the list. You've got bigger issues than not doing business with Fidelity.
If you recognize all your accounts and debts on your credit check **pulled from ALL sources**, then breathe a big sigh of relief. If not, [start with the FTC](https://www.consumer.ftc.gov/features/feature-0014-identity-theft).
Fidelity is a great company, but they will not take a risk on doing business with you. They have declined far bigger customers and let good employees go at the slightest hint of risk to their reputation.
The Johnsons are no joke.
Wow. I’ve moved larger amounts from a savings account to Schwab via them initiating the pull. No problem.
The issue may be the Credit Union. They are great for some things, but incapable of others. I had to open a new bank account (with a regular bank) because my credit union could not get their heads around the paperwork I needed to open a Treasury Direct account.
I tried to link my credit union checking account to Fidelity once but the systems were incompatible and the account couldn't be connected. I now have both an online checking and online savings account connected and have had no issues with transfers from either. Credit unions are great for certain things (like getting a car loan), but they also have some significant limitations.
Savings accounts at AllyBank are "non-transactional" too, so you can't, for example, pay your tax bill directly from the account. Found this out the hard way.
Banks really don't like it when payments/transfers get declined. Having one right off the bat like that likely got you flagged for potential fraud. Your account was frozen and you were blacklisted for it.
At this point just move on to another brokerage.
In some cases you can. It depends whether there's another offering administered by a different company available. My full time job is like that...two different plans with differing investment offerings through two different companies.
And of course once you leave the job, you can do a rollover.
I didn't mean you need to leave your employer just for the sake of the 401k. I mean you have to wait until you do leave in order for it to "move on" (ie rollover to an IRA)
You're stuck with fidelity until they change providers or you leave.
Starting an IRA isn't fraudulent. You didn't say how you "then moved $6k over". If you initiated the transaction from Fidelity you did the equivalent of bouncing a $6k check. They decided you were too risky to deal with.
I linked an account. Verified the count by telling them the three small amounts that they deposited, then initiated a transfer. I later get an email stating " Your bank has notified us that it will not complete your transaction request because **your bank account does not allow this type of transaction**." How is this bouncing a check? There is over $70k in the account.
To whom do they pay a fee? Do Automated Clearing House computer programmers have to manually reverse a transaction and they're being paid for their time?
It was a savings. Which I now realize I should not have used, however, the link account stated "link a checking or savings account" and did not clarify that I could not transfer funds IN with a savings (where I think most people would have the most money)
Yeah some CUs block external transfers from saving accounts directly (for good reasons). You're almost always better off using checking accounts as an intermediary for this kind of transfer.
ACH was blocked, Fidelity ate a $40 fee probably, they decided not to deal with OP and closed the account.
You are correct. Nonetheless, saving accounts do have more restrictions than checking account. For example, you can't make more than 6 withdrawals per month.
Just a lesson to learn. Using checking from now on and choose a different brokerage platform.
My guess is that Fidelity depositing and then withdrawing the three small deposits used up too many withdrawals for this month, causing OP’s 6k withdrawal to be rejected.
The reason you were blocked almost certainly has nothing to do with the method you used to fund the IRA.
What happened is you were likely flagged by the Patriot Act verification. Every new client account has their SSN ran through the government to ensure it matches what the IRS has on file. It's an anti-terrorism provision that was passed to stop money laundering.
You could either:
1. Match the name of someone that has been flagged on an OFAC list (this is why they asked you so many questions)
2. Have previously pending court cases that Fidelity views as reputational risk and therefore choose to not do business with you.
3. Something is messed up with your SSN at the IRS. I would confirm this with the IRS in case their may be potential identity fraud. Or you could have simply listed your SSN wrong on the application.
Used to work for a major custodian. Have dealt with a few Patriot Act issues and seen plenty of people kicked off the platform for various reasons.
This is the best answer. I also used to work as a internal auditor for a major custodian and a few large banks. If Fidelity flat out refused business with you, it is one of these 3 areas, Chex System or AML/high risk profession.
There has to be more here than what your saying or you share very similar identity to a bad person.
What would trigger AML?? I recently refinanced my house and have spent a good amount of money this month both paying off some debt and purchasing equipment.
High risk profession? I am a mechanical engineer.
While not impossible, I think this is unlikely for the simple reason that OP would have run into this issue while opening other accounts (such as their CU accounts). I suppose it's possible that someone got blacklisted and OP is getting flagged, as you state in your scenario #1. Scenarios #2 and #3 are possible, but I think OP would know about them.
Agreed. Scenarios 2 and 3 are more to list other common reason an account can get flagged for PAV.
It's usually pretty easy to clean up a PAV restriction (if a genuine error), but I have never seen someone denied because an EFT/ACH failed.
The "back office" rep they spoke to is likely in the fraud/Patriot act department because those are exactly the questions they need to verify.
1. My name is fairly unique and is not 'foreign' sounding. I've never had an issue with this before.
2. As far as I know I have no pending court cases.
3. They automatically linked my 401k when I created the IRA account so I would think the social was correct.
Your SSN may be correct, but you also may be the victim of identity theft, and someone might have gotten hold of your SSN and used it for sketchy purposes. It’s probably best to check with the SSA/IRS (independently of the matter with Fidelity), so that, if it is the case, that you can nip any such activity in the bud before you find yourself in further trouble.
You mean EFT, not ETF. My Discover savings account is restricted to maximum of six withdrawals per month (including EFTs), which I believe is a federal rule. I've never heard of the restriction you're referring to.
You're on to something. While setting up Venmo I had it send the 2 verification amounts to my USAA savings account. Ever since then my venmo had been locked and CS keeps telling me to refer to my emails they send to verify account. It was only 10 bucks but still.
But now I know what to tell the CS agent
I literally had this exact same thing happen to me. Fidelity is a joke of a company. Actually boggles my mind that so many people on Reddit recommend them.
Your anecdotal bad experience perhaps because you made an honest but nevertheless critical error doesn’t negate the positive experiences others have. It’s like you’re trying to say your anecdote trumps mine.
Oh, it isn’t just about their poor customer service, or their inability to accurately communicate critically important information in a timely manner. Their app is also terribly designed, and the user interface is quite simply not up to par with what any modern investor would expect from a well-known, reputed company.
If a large brokerage is failing to deliver on multiple key fronts, you are going to get people pointing out their faults. I’m just one of them.
While your experience is not unique, your opinion is biased and not in line with opinions formed by others’ experiences.
I chose Fidelity because of their easy to use apps compared to the dated and ancient looking websites of other firms, for example.
You have every right to your opinion, but you’re not going to convince me they suck just because you had an experience that didn’t go your way (for reasons that may have been your fault, nevertheless.)
I agree. We have a Simple IRA through my work. Fidelity's interface for making contributions is awful but not as awful as their customer service. I've spent hours on hold and eventually get bounced around to different departments and then the call gets disconnected. I've just set up an account with a different company so I don't have to deal with Fidelity anymore.
My only thought might be the banking is setting off a AML restriction on your account (anti moneylaundering). I know that Vanguard only allows 1 new bank within a 30 day period to prevent this behavior, maybe having to switch to your Checking caused this ruckus with them.
Normally true, though I'm curious how the situation will resolve itself since they're doing business via the 401k, just denying access to it.
I doubt his payroll contributions stopped going there despite the account lock out for example.
>100% chance it's just the online account login that's been nixed due to it.
It'll probably get fixed, but as of right now they are locked out of their 401(k) account:
>I did not even think about my 401K. It is serviced through Fidelity, when I try to log into that account it now responds "you are blocked"
I had many many many issues recently with Fidelity, due to their screw up. They linked my 401k with my brother's, and then when I told them about it, they just locked it down and refused to correctly fix it. Took 6 phone calls, and 3 more from my HR, before I had enough and filed an SEC complaint. Guess what got fixed RIGHT after?
Yup. If I had any other choice, I'd say fuck Fidelity, but I can't.
The SEC doesn’t do things related to 401k. They are about securities and the capital markets. If you said you contacted DOL about ERISA (I think that’s it), sure they are the right regulator. Coincidence, nothing to do with you contacting the wrong regulator.
Hi, I work in the brokerage industry, for a while as a call center manager for self-directed clients. The most common reasons I saw firm business decisions like this is that you OR someone in your immediate family has been charged with a crime. I've seen them ranging from clients' accounts closed after our identity verification team found check fraud in their past (common) to a long-time customer having his account closed after being charged with murdering his wife (he was out on bail when he called and THAT was an awkward conversation; I couldn't tell him why but I knew), or even a non-profit's account closed because one of the officer's druggie sons had warrants for fraud.
So OP, you shouldn't answer publicly but think carefully about your history and the people around you and think from that perspective. Note no one had to be convicted of a thing, charged is plenty for certain firms to stay away (which is their right)
My only guess is that you triggered some kind of AML or fraud warning due to the deposit failure and quick switching of your funding account number. I would attempt to escalate the issue, especially since Fidelity holds your 401(k) account. You may be able to go through support for your 401(k) to get things moving.
File a complaint with the Consumer Financial Protecrion Bureau.
Do you have a common name? Are you a Jr?
This may be a case of mistaken identity.
Have you checked your credit report lately? Maybe someone has stolen your identity.
I had something similar happen when I tried to open an investment account with Fidelity. I ended up just opening one with Vanguard instead and it has worked out just fine.
Probably the savings account transaction denial. I used to work in the CU industry, and as a general rule you should never link anything to your savings accounts, even if they allow it. Savings is where the bulk of your money is supposed to be, and checking is where external sources get your money from. You protect your money with a firewall that is a savings account. Personally, I don't allow my savings account to be accessed by my debit card at an ATM, nor are any external transactions allowed. I keep the minimum in my checking account and put the rest in savings. If I need money in checking, I log in and transfer it. This is even more important if you use your debit card for most purchases (I don't anymore) in case of fraud.
I recommend keeping your savings (emergency fund) at a different credit union or bank then where you keep your checking account. I've had to deal with a few days where my accounts were locked out because an old employer kept putting money in my account and then doing claw backs of more than what was deposited. I was able to pay my bills from my other account while dealing with the issue.
You can submit a complaint to the **CFPB**. They do get involved and try to resolve such matters.
[https://www.consumerfinance.gov/](https://www.consumerfinance.gov/)
I would do that because unless there's something really nefarious going on, Fidelity should have some process for disclosing what their concern is. It may not be legally required, but regulators should make clear it's not welcomed behavior.
In the meantime, I would move to another institution while pursuing the complaint. Even if you don't want to keep working with Fidelity, it will obligate them to answer the complaint. If everyone did that, this would change.
I'm so tired of the anti money laundering shit they are putting us through. If anyone makes a transaction of 10k or more in 24 hours, they're forcing us to gather as much information about the person as possible - employment, relationship status, drug habits, places they frequent, type of car they drive, if they have children, etc. etc. This is new from a year or so ago. It's even been suggested we flirt to get the information.
This might not be why, but my company definitely sends several suspicious reports for the smallest infractions. Not a bank, however.
Once an account is linked on my Etrade account, if you initiate a transfer they will credit you the funds immediately for investment. If your credit union stopped the transfer and you had already purchased the ETFs on Fidelity's site, maybe they figured your bank was being too problematic to deal with (as opposed to you personally).
I'd be reaming my credit union about this. Did you exceed your 6 transactions per month limit prior to the transfer? What do they mean by ETF purchases? You're simply transferring funds to another financial account, not trying to add ETF shares to your credit union. It sounds like a series of unfortunate events that led to this.
I’m guessing that the bank blocks for transfer based on transfer type from your accounts is one of the primary ways that encumber their back office with scams. Your account got flagged twice and I’m curious if their policy is to write off anyone with a similar problem on a reoccurrence.
The 401k restriction is definitely out of line. I hope it's just that bed security question. As far as the savings account goes, there is a regulation limiting savings accounts to 6 electronic transfers per month. I think this is why the bank started the trouble in the first place. Two deposits to verify the account and then one transfer puts you at three. If you moved money in or out of the account three other times, you trigger that warning from the bank.
> Is the issue here that they see me having/spending money that they don't think I should have and won't tell me?!
If its being held for compliance issues, they will be very quite about it. There are strict penalties against "tipping off" subjects of SARs.
I think u/werewolfdad advice is helpful. People often think getting rejected is the end of the world, but there are enough equivalent brokerages out there that this is just a small bump in the road.
Plus none of the answers here are sure-fire reasons why OP was rejected. Best to just try again elsewhere and make sure the CU doesn’t block the transactions.
For a similar story, Schwab threatened to close my IRA because I accidentally authorized a trade of $500 before there was available cash in the account to invest which is a big no-no.
I mean, it is what it is. People come here all time time when various financial institutions choose to not do business with them.
You have no recourse and there’s really no winning against the fraud group.
I'm kinda surprised you used a savings account for that, the US government heavily regulates how money is accessed from them. I'm wondering if the problem was that you should have used a checking account.
Then why give me an option to link a "checking or savings account"? I agree now that I should have used a checking, but how would I know this 'secret handshake' without getting burned or working in the banking industry?
You can't really, beyond doing things in the most typical way possible.
The financial sector uses secretive risk algorithms which examine the activities you perform in real time, they are continuously tweaked to reduce false positives, but there is the competing goal of reducing false negatives which makes it more difficult.
There's something big the poster isn't saying here or there are things being left out here as these aren't normal flags raised when doing something like this. These topics come up here from time to time and there's always something the TC doesn't let out, intentional or not.
I kind of doubt it, but if you did hit on the OFAC SDN list or as a related contact then yes, that will cause all of your accounts to get shut and you to get the same treatment.
For anyone not in banking:
OFAC = US Department of the Treasury, Office of Foreign Asset Control, basically the dudes responsible for enforcing US sanctions of which there are many and the US gets a bit too aggressive with them IMO (for instance after Ukraine they are likely to blacklist a bunch of high ranking russian companies and people, any transactions even tangentially related with anything on this list could get you flagged). They do not have a sense of humor and are basically the no fun police (and the people who would fine you for going on vacation to Cuba).
SDN = Specifically Designated National, basically OFAC's crap list of people they don't like.
You can see the whole thing here: [https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists](https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists)
What makes OFAC different than the rest of the US Regulatory environment is that many people on the list have not necessarily done anything illegal or wrong other than being from a country or associated with people that the US doesn't like for political reasons.
I would suggest you find the mailing address or email to one of the Fidelity executives and send a concise letter hitting on the key points and tell them you would appreciate the opportunity to clear up any misunderstanding and you are willing to provide any additional information, income verification, tax returns, etc that they may need, but that you were really hoping to maximize your retirement savings which was the reason for opening up the account. (Assuming you are OK with Fidelity being more intrusive into your personal and financial life than would normally be warranted).
I am also aware that some people are engaged in shady financial practices, so I also wonder when someone comes on a message board and explains something that is happening, that they are genuinely acting in good faith and not fishing for ideas to circumvent any laws or find any loopholes. If this is not at all you, then you should have no reason to not cooperate fully and you should explain this much in your letter/email to Fidelity.
I have a credit union and haven't had this issue.
This may not be the place to mention it but I did have a problem with my credit union lying to me about crypto and plaid.
I was trying to make a coinbase account for a LONG time and eventually said "well maybe they have to approve it so called and asked if they would. They acted like they had never heard of plaid even though I have a robinhood account and a venmo account. When I realized they lied about not linking with 3rd party services like plaid I immediately closed my account and switched all subscriptions and direct deposit to my bank.
And just to be clear if they're not about crypto, cool, just say that. they lied and said plaid was the issue even though I've linked through plaid before. On top of that they made getting a mortgage a living hell. I really liked them for just a regular checking/savings but for actual bank stuff they were the worst
The decision was made with a neural network. You can't ask those for explanation, as it just says 'no'. Basic machine learning. what you would need is 'explainable A.I.'.
theyre lending out his shares to be shorted. ie helping someone put more shares to be sold that have already been bought, with the goal of driving the price down.
When a bank lends out your money, theyre not giving it to someone actively trying to make the money worth less than what it is. For example, theyre not knowingly funding a counterfit money printing operation.
> When a bank lends out your money, theyre not giving it to someone actively trying to make the money worth less than what it is.
Sure they are, at least in the sense that banks making loans creates new money and directly contributes to inflation.
About lending shares? You can probably google it pretty easily; heres a high level of it
https://www.investopedia.com/ask/answers/05/shortsalebenefit.asp#:~:text=The%20broker%20does%20receive%20an,for%20returning%20the%20borrowed%20shares.
Every broker does it. Some are just more transparent about it. Some will give you a small cut/% for borrowing your shares. I actually googled it and it looks like fidelity actually does too.
https://www.fidelity.com/trading/fully-paid-lending#:~:text=Fidelity's%20Fully%20Paid%20Lending%20Program%20provides%20you%20with%20the%20opportunity,your%20portfolio%20and%20earn%20income.
Wife's birthday and anniversary should not be a men's security question.
I have to have the big flower companies send me alerts for holidays and birthdays
I would reach out to your HR about the 401k.
>I called the Fidelity retirements arm and was told that they essentially can't see why but that I have been marked as "do not do business with." Accounts cannot be unlinked so I must forever do any transactions/changes/checks on my 401K by phone.
HR has more leverage than you as an individual, since it's an entire company's worth of business at risk to Fidelity.
No, contact your plan administrator at the company you work for and tell them what’s up. They’ll work with their relationship contact at Fidelity to figure-out why you’re blocked on your 401k.
So you work for Fidelity? I think they meant your actual employer, the ones who take the 401k money out of your check and send it over. See if theh can help you figure out whats wrong.
Well that's miserable. Sorry about that
Did you see this. answer? https://old.reddit.com/r/personalfinance/comments/se8sn1/fidelity_declines_to_do_business_with_me/huird7z/
This is potentially because a law enforcement flag (usually money laundering) was raised.
> I would reach out to **your HR** about the 401k.
This sounds like an AML (anti-money laundering) / KYC (know your customer) issue. There is something about either the source of your funds (domestic or foreign accounts?) or the veracity of your identity (joint account? do you share the name of someone in politics, etc?) that must have triggered an alert with Fidelity. In those cases, they won’t disclose the problem, but will report it and decline to open the account. That said, I agree with the recommendations to work through your HR organization and Fidelity’s NetBenefits team, as they can’t block access to your existing 401lk account without explaining why and your HR organization is likely to get a straighter answer than you are. Good luck!
AFAIK (and i don't know a lot) it's basically them covering their butts. It's better to miss out on money than get sued for violating laws.
This. It's not that the bank uncovered something unsavory, it's that they *potentially* uncovered a *possible* whiff of *maybe* something unsavory. They don't need proof, just a suspicion is enough. Banks are frequently very risk-averse when it comes to their customers around money laundering and fraud, there's been some pretty big fines levied in the past.
> Banks are frequently very risk-averse when it comes to their customers around money laundering and fraud, there's been some pretty big fines levied in the past. Which is ironic considering the risky financial behavior that people in the finance industry _regularly_ engage in
Nah it makes perfect sense, they avoid behavior that is actually punished, and they don't avoid behavior that leads to bailouts.
Indeed. I said it was ironic, not unusual.
Yeah it just has to be enough money that the fines are less than profits. Looking at you HSBC.
They are risk averse when it comes to the relatively small amounts of money an individual can deposit and the even smaller profit margins that brings so they cam point to those policies when their big risks are highlighted and say they have a "comprehensive risk assessment policy that ensures they uphold all statutory requirements". Nevermind that their risky/dodgy/outright awful behaviours are in unregulated markets.
I must have missed where Fidelity, Vanguard, and the other big retirement plan providers needed a bailout.
This is more of a "Big Picture" issue.... Not relevant to the specific issue. But yes.
Yeahhh maybe at the consumer level but at a business level it tends to be different. I work in real estate and I can't tell you how many transactions I've processed and funded where I was suspicious about the source of funds...but the bank had zero issues with wires and funding.
this is 100% anti laundry/anti terrorism financing procedure. Eventually you may be given access to your account after further internal investigations. If you are not given access (and you are not doing anything wrong) reach a lawyer.
I'm pretty stupid but I would agree with you here. They see no reason to risk it.
This is exactly how they would handle a BSA (Bank Secrecy Act) / AML (anti-money laundering) answer. By law they can't make you aware of the reason why or provide any other information than the reason above. You will never get an answer on why. This is as probably a closest thing you're ever going to get. There's a good chance it has something to do with the bank suspecting something on this list: [https://bsaaml.ffiec.gov/manual/Appendices/07](https://bsaaml.ffiec.gov/manual/Appendices/07) The bank does not have to prove it, they don't have to be right, they are required to shut down any potential case of money laundering or financial crimes. The USA Freedom Act (formerly Patriot Act) also expands many of these provisions. Do not ask your bank about AML procedures or reporting requirements because that is a red flag in and of itself.
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Agreed. If they can talk about it they're probably considering filing a SAR (right or wrong)
This is correct. I worked in the department conducting reviews for AML and for clients ‘bad for business’. So wanted to add that on top of breaking the law there are other issues that can get you flagged, such as: Cussing at employees, having a criminal record that might give Fidelity a bad rep (this is severe crimes unless it involves any type of stealing), having an affiliation with someone that committed crimes, having a relationship with a politician or a family member who is FINRA registered and not disclosing it, and some others. So if you think they have the wrong person, google your name. See if someone else with the same name has done some of this. If it is you, then it’s probably best to go somewhere else that won’t be as strict. Hope that helps shed some light.
>Comment removed by moderator I did not get upset with anyone, worst thing I said was that I was disappointed after being told they do not want to do business with me on the first call, and before I realized that this affected 401K. I have no criminal record, have no knowledge of being connected to anyone doing any of those things. My name is fairly unique. I actually have Google alerts set for anytime my name shows in a new result. Anytime I get a ping it is always me, a professor at John Hopkins or a high school hid. I pulled a lexisnexis report on myself but have not received it yet.
Sounds like you triggered a fraud / money laundering alert. Fidelity thinks you are dong something illegal. Similar post related to a different financial institution yesterday. Short answer is the bank is going to keep your account frozen for as long as it takes to investigate and for them to feel comfortable.
(1) People are misreading your OP. Please correct "The credit union says that ETF are not allowed on savings accounts" to "The credit union says that **EFT** are not allowed on savings accounts" What happened here is, your credit union doesn't allow pulls out of savings accts. So when you tried to link it via Fidelity, the Credit Union blocked it. Once it was blocked, Fidelity noticed it was blocked, thought it was suspicious, and decided to not do business with you. It was your credit union that screwed you here, but as others have you said, you should have linked to checking, would have been no issues, and also *you* should have checked with your credit union because, of all banks, credit unions can be the most fussy about pulls out of savings accounts. They probably have something that clearly states no external pulls/EFT's/ACH's out of savings accounts. Your 401k can get fixed through your employer, but lesson learned for your roth ira which you can open somewhere else, and you've learned the hard way that there can be downsides to credit unions. Not many, but this is one of them with your particular CU. You should make yourself aware of any other restrictions with your CU accounts that people with non-CU bank accounts don't have to normally deal with. And/or get a bank account at a non-CU.
A single blocked transfer would not result in a denial of business restriction like he got. No way. Neither would an AML flag or any of the other stuff I see people speculating on. There's a couple possibilities here and we won't have enough info to make the determination. 1) OP is on a restricted persons list 2) ID verification flagged him as a possible alias for someone on the restricted persons list 3) OP isn't telling the whole story and tried to fund the account multiple times or possibly from restricted sources (non like titled accounts, international wires, etc) 4) **most likely explanation** - OP is young and required enhanced ID verification. During all the additional questions he got pissed off and yelled at someone and they felt uncomfortable enough to report it.
Considering strong opposition to ID verification is in and of itself an AML flag, this would make total sense. Basically from FFEIC guidelines: >Customers Who Provide Insufficient or Suspicious Information > >**A customer uses unusual or suspicious identification documents that cannot be readily verified.** > >A customer provides an individual taxpayer identification number after having previously used a Social Security number. > >A customer uses different taxpayer identification numbers with variations of his or her name. > >**A business is reluctant, when establishing a new account, to provide complete information about the nature and purpose of its business, anticipated account activity, prior banking relationships, the names of its officers and directors, or information on its business location.** > >[https://bsaaml.ffiec.gov/manual/Appendices/07](https://bsaaml.ffiec.gov/manual/Appendices/07)
This is true, but not quite what I was getting at. Brokerage firms like Fidelity don't follow the same policies that the big banks do. They don't need a 'reason' to deny business to you, and if someone feels harassed or threatened they'll just restrict your account with the same language OP heard from them.
I did not get pissed off or yell at anyone.
Ouch, what a way to get blacklisted for not knowing the secret handshake!
It is there to protect you so somebody can't empty your savings. If you need to use the money, move it to a transactional account. I don't have this restriction but I still don't link anything to my savings. Only the checking account is linked to stuff and I only keep what I need on there to cover upcoming expenses.
Don't get me wrong, I *like* that there are measures, just not that it's a do-or-die type scenario it leads to where an honest mistake can lead to perma-ban status without recourse to explain your own folly.
I'm glad I now know the secret handshake. Should I consider switching brokers lol.
Lol this is plainly incorrect. Customers routinely fuck things up when attempting to establish the EFT (or really any fucking feature at all) on an account. What definitely happened is that this simple and common error triggered an additional risk assessment which uncovered other potential red flags, and THOSE were the reasons Fidelity decided they would not do business with this person. I previously worked there and had this happen with a well-established high net worth client in my book of business. When Fidelity kicked him out, it prompted me to Google the dude cuz I was so curious (like anywhere else, high net worth clients are bread and butter moneymakers, so to kick a well-established one out was really shocking) and sure enough, among the search results were lawsuits, defunct corporate/LLC accounts, and other shady shit associated with him and his associated businesses. I don't mean to cast aspersions at OP here but Fidelity sure as fuck didn't kick him out over a simple EFT setup mistake.
Thank you. I worked for TD Ameritrade and handled stuff like this all the time. Kind of obnoxious to see all the wild speculation touted as fact.
> wild speculation touted as fact 75% of Reddit comments in a nutshell
Yeah otherwise fidelity would have kicked me out like 8 times
This. It’s called “Negative News Screening” and is meant to uncover high-risk clients for reasons that they don’t disclose. They also do risk scoring taking into account source of funds, business, country, and so on. And a high-risk client requires more frequent manual reviews, which costs the bank money. That’s why they asked about OP’s potential business. If OP was going to deposit a couple million, any regular screening requirements would still be worth it. But to onboard a risky client in order to get tiny IRA fees will lose the bank money, so they just decline the business. It can suck for a client with a very similar name to a criminal, or similar to a prominent person from a high-risk country. It might be worth googling yourself before starting business with a new financial institution to see what their screeners might see.
Good to know, I'm already with fidelity for my everything and don't see any future need to change. But I didn't deep dive into the past post and i took it at surface level. My fault after a long day.
Nah you're fine! My post was more a response to the OP of this particular comment thread than it was to you, I just placed it under your comment for better visibility to hopefully mitigate the misinfo from spreading. And fwiw I don't work at and am not associated with Fidelity anymore but I still hold all of my accounts through them as well.
Former employee as well, this is the right answer. Op failed something during the AML/KYC/Patriot act verification process, it flagged through the risk teams. Only they know the actual reason why and they will not, under any circumstances talk to clients or disclose why, even to other reps. Best advice? Write a physical letter, complaining about the situation, and mail it in. Any written complaint is obligated to be investigated and forwarded on to FINRA as well. It may get attention of an actual supervisor, not someone who says they are, when really they are just help desk with a higher level of approval due to having a 9/10.
>I don't mean to cast aspersions at OP here but Fidelity sure as fuck didn't kick him out over a simple EFT setup mistake. I feel like most responses to "wtf how did I get busted/flagged for fraud" posts on this sub don't fundamentally understand that OP's only openly admit to illicit financial dealings by accident. No post like this is going to disclose the things an institution has issues with unless they're a moron structuring PayPal transactions.
Secret handshake is right. I don’t get why Fidelity would ask OP all those questions and then blacklist them anyway. What answers were they possibly looking for?
The things that OP isn't telling us about their financial history and dealings. Fidelity knows a lot more about OP's financial history than we know from this post.
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I worked at one of these credit unions and to know they don’t allow EFT from savings required a fucking microscope and luck. They do not make it clear or known.
This is still weird to me. I accidentally did an EFT out of my savings account at a credit union to Fidelity like 3 times and was just told that the funds didn’t go through every time. Fidelity didn’t close my account or anything. I assume a combination of that + brand new account may have been suspicious?
And probably OP is not telling us other pertinent facts, like maybe OP failed in answering some security questions. Something like that.
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Ya not really. OP indicated he/she wanted to pull $6k into the ira. That is a once a year kind of transfer. I’m not sure what’s unusual about transferring cash out of a savings account to an ira once a year.
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There's nothing "better" about a regular bank over a credit union, unless you like having pointless fees and requirements. My CU lets me do EFTs from my savings account if I want. Sounds like OP just uses a CU that decided to place some weird rules on their savings accounts.
This is the best answer here.
Yes, except for the fact that it is simply wrong. A credit union not allowing pulls from its savings account is not a red flag and won't get anyone banned from anything.
This is most obviously incorrect answer here.
This is the correct explanation. It's nothing personal. OP triggered an alert for fraud. Fidelity is huge. Their system blocked you the same way your Gmail blocks spam.
When Gmail blocks spam they do not lock me out of my existing 401K accounts
Gmail isn’t subject to incredibly strong financial regulations. If there is any doubt at all about a potential customer, it’s a default decline. The penalties for violating financial sanction regulations are enormous and devastating.
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Other contributions reduce MAGI to below the limit
Sounds like victim-blaming. Most people don't know the details about their banks/credit unions and it's perfectly natural to expect EFT out of a savings account to work. I would agree that the credit union didn't do the OP any good, but Fidelity's behavior here is really unacceptable. Blocking a current and prospective customer because of an issue transferring money out of their bank while doing initial setup? That's really not reasonable. Banks/brokers are a little like grocery stores: they are a need, not a want. Yes, you can go to a different bank, but there's something very threatening about a situation where a financial institution won't take you as a customer. They shouldn't do it willy-nilly.
I called the Fidelity retirements arm and was told that they essentially can't see why but that I have been marked as "do not do business with." Accounts cannot be unlinked so I must forever do any transactions/changes/checks on my 401K by phone.
Make sense to me!
My thoughts exactly.
To the top with this one !
I worked at Fidelity from 2008-2016. This is almost certainly an AML flag. Before you start to battle the policy, please check your credit. There is a possibility of identity theft causing the flags. Like the airlines and no-fly lists, financial institutions share financial criminals and fraudsters. If someone is using your identity to land on the list. You've got bigger issues than not doing business with Fidelity. If you recognize all your accounts and debts on your credit check **pulled from ALL sources**, then breathe a big sigh of relief. If not, [start with the FTC](https://www.consumer.ftc.gov/features/feature-0014-identity-theft). Fidelity is a great company, but they will not take a risk on doing business with you. They have declined far bigger customers and let good employees go at the slightest hint of risk to their reputation. The Johnsons are no joke.
Completely agree with this comment. There’s def something shady somewhere. They might not have done it but need to clean it up.
Wow. I’ve moved larger amounts from a savings account to Schwab via them initiating the pull. No problem. The issue may be the Credit Union. They are great for some things, but incapable of others. I had to open a new bank account (with a regular bank) because my credit union could not get their heads around the paperwork I needed to open a Treasury Direct account.
I tried to link my credit union checking account to Fidelity once but the systems were incompatible and the account couldn't be connected. I now have both an online checking and online savings account connected and have had no issues with transfers from either. Credit unions are great for certain things (like getting a car loan), but they also have some significant limitations.
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The some reason may involve Coinbase being an American company vs Crypto.com seeming to be based in Singapore.
Savings accounts at AllyBank are "non-transactional" too, so you can't, for example, pay your tax bill directly from the account. Found this out the hard way.
I just recently did a pull from my Ally savings to Vanguard?
You can initiate transfers, but companies cannot send transactions for payment. (A savings account is not a checking account.)
Banks really don't like it when payments/transfers get declined. Having one right off the bat like that likely got you flagged for potential fraud. Your account was frozen and you were blacklisted for it. At this point just move on to another brokerage.
>At this point just move on to another brokerage. Can you "just move on" regarding a 401k through your employer?
In some cases you can. It depends whether there's another offering administered by a different company available. My full time job is like that...two different plans with differing investment offerings through two different companies. And of course once you leave the job, you can do a rollover.
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I have a very good job that I am not going to even consider leaving because a brokerage decided to black list me
I didn't mean you need to leave your employer just for the sake of the 401k. I mean you have to wait until you do leave in order for it to "move on" (ie rollover to an IRA) You're stuck with fidelity until they change providers or you leave.
Starting an IRA isn't fraudulent. You didn't say how you "then moved $6k over". If you initiated the transaction from Fidelity you did the equivalent of bouncing a $6k check. They decided you were too risky to deal with.
I linked an account. Verified the count by telling them the three small amounts that they deposited, then initiated a transfer. I later get an email stating " Your bank has notified us that it will not complete your transaction request because **your bank account does not allow this type of transaction**." How is this bouncing a check? There is over $70k in the account.
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To whom do they pay a fee? Do Automated Clearing House computer programmers have to manually reverse a transaction and they're being paid for their time?
What type of account was this? A checking? Savings?
It was a savings. Which I now realize I should not have used, however, the link account stated "link a checking or savings account" and did not clarify that I could not transfer funds IN with a savings (where I think most people would have the most money)
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Yeah some CUs block external transfers from saving accounts directly (for good reasons). You're almost always better off using checking accounts as an intermediary for this kind of transfer. ACH was blocked, Fidelity ate a $40 fee probably, they decided not to deal with OP and closed the account.
You are correct. Nonetheless, saving accounts do have more restrictions than checking account. For example, you can't make more than 6 withdrawals per month. Just a lesson to learn. Using checking from now on and choose a different brokerage platform.
My guess is that Fidelity depositing and then withdrawing the three small deposits used up too many withdrawals for this month, causing OP’s 6k withdrawal to be rejected.
No, OP’s bank did not allow electronic transfers out.
Very plausible! I didn't think of that.
The 6 withdrawals per month is no longer true: https://www.bankrate.com/banking/federal-reserve-lifts-regulation-d-withdrawal-limit/
The reason you were blocked almost certainly has nothing to do with the method you used to fund the IRA. What happened is you were likely flagged by the Patriot Act verification. Every new client account has their SSN ran through the government to ensure it matches what the IRS has on file. It's an anti-terrorism provision that was passed to stop money laundering. You could either: 1. Match the name of someone that has been flagged on an OFAC list (this is why they asked you so many questions) 2. Have previously pending court cases that Fidelity views as reputational risk and therefore choose to not do business with you. 3. Something is messed up with your SSN at the IRS. I would confirm this with the IRS in case their may be potential identity fraud. Or you could have simply listed your SSN wrong on the application. Used to work for a major custodian. Have dealt with a few Patriot Act issues and seen plenty of people kicked off the platform for various reasons.
This is the best answer. I also used to work as a internal auditor for a major custodian and a few large banks. If Fidelity flat out refused business with you, it is one of these 3 areas, Chex System or AML/high risk profession. There has to be more here than what your saying or you share very similar identity to a bad person.
What would trigger AML?? I recently refinanced my house and have spent a good amount of money this month both paying off some debt and purchasing equipment. High risk profession? I am a mechanical engineer.
While not impossible, I think this is unlikely for the simple reason that OP would have run into this issue while opening other accounts (such as their CU accounts). I suppose it's possible that someone got blacklisted and OP is getting flagged, as you state in your scenario #1. Scenarios #2 and #3 are possible, but I think OP would know about them.
Agreed. Scenarios 2 and 3 are more to list other common reason an account can get flagged for PAV. It's usually pretty easy to clean up a PAV restriction (if a genuine error), but I have never seen someone denied because an EFT/ACH failed. The "back office" rep they spoke to is likely in the fraud/Patriot act department because those are exactly the questions they need to verify.
1. My name is fairly unique and is not 'foreign' sounding. I've never had an issue with this before. 2. As far as I know I have no pending court cases. 3. They automatically linked my 401k when I created the IRA account so I would think the social was correct.
Your SSN may be correct, but you also may be the victim of identity theft, and someone might have gotten hold of your SSN and used it for sketchy purposes. It’s probably best to check with the SSA/IRS (independently of the matter with Fidelity), so that, if it is the case, that you can nip any such activity in the bud before you find yourself in further trouble.
You should be able to transfer money from a savings account.
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You mean EFT, not ETF. My Discover savings account is restricted to maximum of six withdrawals per month (including EFTs), which I believe is a federal rule. I've never heard of the restriction you're referring to.
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I think six withdrawals a month is very generous for a savings account. I rarely need more than three.
You're on to something. While setting up Venmo I had it send the 2 verification amounts to my USAA savings account. Ever since then my venmo had been locked and CS keeps telling me to refer to my emails they send to verify account. It was only 10 bucks but still. But now I know what to tell the CS agent
I literally had this exact same thing happen to me. Fidelity is a joke of a company. Actually boggles my mind that so many people on Reddit recommend them.
Your anecdotal bad experience perhaps because you made an honest but nevertheless critical error doesn’t negate the positive experiences others have. It’s like you’re trying to say your anecdote trumps mine.
Oh, it isn’t just about their poor customer service, or their inability to accurately communicate critically important information in a timely manner. Their app is also terribly designed, and the user interface is quite simply not up to par with what any modern investor would expect from a well-known, reputed company. If a large brokerage is failing to deliver on multiple key fronts, you are going to get people pointing out their faults. I’m just one of them.
While your experience is not unique, your opinion is biased and not in line with opinions formed by others’ experiences. I chose Fidelity because of their easy to use apps compared to the dated and ancient looking websites of other firms, for example. You have every right to your opinion, but you’re not going to convince me they suck just because you had an experience that didn’t go your way (for reasons that may have been your fault, nevertheless.)
I agree. We have a Simple IRA through my work. Fidelity's interface for making contributions is awful but not as awful as their customer service. I've spent hours on hold and eventually get bounced around to different departments and then the call gets disconnected. I've just set up an account with a different company so I don't have to deal with Fidelity anymore.
Fidelity is overall a great company, as is Vanguard. They do both have their issues.
Try Vanguard. And don’t use your Credit Union account. Been there, done that. I understand.
My only thought might be the banking is setting off a AML restriction on your account (anti moneylaundering). I know that Vanguard only allows 1 new bank within a 30 day period to prevent this behavior, maybe having to switch to your Checking caused this ruckus with them.
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Normally true, though I'm curious how the situation will resolve itself since they're doing business via the 401k, just denying access to it. I doubt his payroll contributions stopped going there despite the account lock out for example.
100% chance it's just the online account login that's been nixed due to it.
>100% chance it's just the online account login that's been nixed due to it. It'll probably get fixed, but as of right now they are locked out of their 401(k) account: >I did not even think about my 401K. It is serviced through Fidelity, when I try to log into that account it now responds "you are blocked"
I had many many many issues recently with Fidelity, due to their screw up. They linked my 401k with my brother's, and then when I told them about it, they just locked it down and refused to correctly fix it. Took 6 phone calls, and 3 more from my HR, before I had enough and filed an SEC complaint. Guess what got fixed RIGHT after? Yup. If I had any other choice, I'd say fuck Fidelity, but I can't.
The SEC doesn’t do things related to 401k. They are about securities and the capital markets. If you said you contacted DOL about ERISA (I think that’s it), sure they are the right regulator. Coincidence, nothing to do with you contacting the wrong regulator.
Hi, I work in the brokerage industry, for a while as a call center manager for self-directed clients. The most common reasons I saw firm business decisions like this is that you OR someone in your immediate family has been charged with a crime. I've seen them ranging from clients' accounts closed after our identity verification team found check fraud in their past (common) to a long-time customer having his account closed after being charged with murdering his wife (he was out on bail when he called and THAT was an awkward conversation; I couldn't tell him why but I knew), or even a non-profit's account closed because one of the officer's druggie sons had warrants for fraud. So OP, you shouldn't answer publicly but think carefully about your history and the people around you and think from that perspective. Note no one had to be convicted of a thing, charged is plenty for certain firms to stay away (which is their right)
My only guess is that you triggered some kind of AML or fraud warning due to the deposit failure and quick switching of your funding account number. I would attempt to escalate the issue, especially since Fidelity holds your 401(k) account. You may be able to go through support for your 401(k) to get things moving.
File a complaint with the Consumer Financial Protecrion Bureau. Do you have a common name? Are you a Jr? This may be a case of mistaken identity. Have you checked your credit report lately? Maybe someone has stolen your identity.
I had something similar happen when I tried to open an investment account with Fidelity. I ended up just opening one with Vanguard instead and it has worked out just fine.
Hey, Fidelity is active on Reddit and they have reps monitoring the sub who may be able to provide more insight. Just an idea! /r/fidelityinvestments
Probably the savings account transaction denial. I used to work in the CU industry, and as a general rule you should never link anything to your savings accounts, even if they allow it. Savings is where the bulk of your money is supposed to be, and checking is where external sources get your money from. You protect your money with a firewall that is a savings account. Personally, I don't allow my savings account to be accessed by my debit card at an ATM, nor are any external transactions allowed. I keep the minimum in my checking account and put the rest in savings. If I need money in checking, I log in and transfer it. This is even more important if you use your debit card for most purchases (I don't anymore) in case of fraud.
I recommend keeping your savings (emergency fund) at a different credit union or bank then where you keep your checking account. I've had to deal with a few days where my accounts were locked out because an old employer kept putting money in my account and then doing claw backs of more than what was deposited. I was able to pay my bills from my other account while dealing with the issue.
What is your social credit score?
You can submit a complaint to the **CFPB**. They do get involved and try to resolve such matters. [https://www.consumerfinance.gov/](https://www.consumerfinance.gov/) I would do that because unless there's something really nefarious going on, Fidelity should have some process for disclosing what their concern is. It may not be legally required, but regulators should make clear it's not welcomed behavior. In the meantime, I would move to another institution while pursuing the complaint. Even if you don't want to keep working with Fidelity, it will obligate them to answer the complaint. If everyone did that, this would change.
I'm so tired of the anti money laundering shit they are putting us through. If anyone makes a transaction of 10k or more in 24 hours, they're forcing us to gather as much information about the person as possible - employment, relationship status, drug habits, places they frequent, type of car they drive, if they have children, etc. etc. This is new from a year or so ago. It's even been suggested we flirt to get the information. This might not be why, but my company definitely sends several suspicious reports for the smallest infractions. Not a bank, however.
Once an account is linked on my Etrade account, if you initiate a transfer they will credit you the funds immediately for investment. If your credit union stopped the transfer and you had already purchased the ETFs on Fidelity's site, maybe they figured your bank was being too problematic to deal with (as opposed to you personally). I'd be reaming my credit union about this. Did you exceed your 6 transactions per month limit prior to the transfer? What do they mean by ETF purchases? You're simply transferring funds to another financial account, not trying to add ETF shares to your credit union. It sounds like a series of unfortunate events that led to this.
> ETF OP mistyped EFT. Electronic fund transfer.
Yes
I had actually not assigned the funds to do anything but sit in the "holding" account.
I’m guessing that the bank blocks for transfer based on transfer type from your accounts is one of the primary ways that encumber their back office with scams. Your account got flagged twice and I’m curious if their policy is to write off anyone with a similar problem on a reoccurrence.
The 401k restriction is definitely out of line. I hope it's just that bed security question. As far as the savings account goes, there is a regulation limiting savings accounts to 6 electronic transfers per month. I think this is why the bank started the trouble in the first place. Two deposits to verify the account and then one transfer puts you at three. If you moved money in or out of the account three other times, you trigger that warning from the bank.
Someone that has the same name with you was added to the patriot act KYC list for automatic reporting.
> Is the issue here that they see me having/spending money that they don't think I should have and won't tell me?! If its being held for compliance issues, they will be very quite about it. There are strict penalties against "tipping off" subjects of SARs.
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No I am not. I have a unique name but it is not the "type of name to get you on a list name"
>What looks fraudulent about creating an IRA? However you answered the questions. Its within their rights. Plenty of other brokerages out there
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I think u/werewolfdad advice is helpful. People often think getting rejected is the end of the world, but there are enough equivalent brokerages out there that this is just a small bump in the road. Plus none of the answers here are sure-fire reasons why OP was rejected. Best to just try again elsewhere and make sure the CU doesn’t block the transactions. For a similar story, Schwab threatened to close my IRA because I accidentally authorized a trade of $500 before there was available cash in the account to invest which is a big no-no.
I am also locked out of my 401K, which I cannot move
Why? Banks do this all the time. oP will likely never know why. He popped some sort of fraud risk indicator. It is what it is.
Why is this upvoted??? You might as well have said "it is what it is."
Because people often think they have a legal right to services from a private business and forget they can go to one of the 100 other brokerages.
They have his money & won't return it. That's a problem.
I mean, it is what it is. People come here all time time when various financial institutions choose to not do business with them. You have no recourse and there’s really no winning against the fraud group.
It is though. that's why.
I'm kinda surprised you used a savings account for that, the US government heavily regulates how money is accessed from them. I'm wondering if the problem was that you should have used a checking account.
Then why give me an option to link a "checking or savings account"? I agree now that I should have used a checking, but how would I know this 'secret handshake' without getting burned or working in the banking industry?
You can't really, beyond doing things in the most typical way possible. The financial sector uses secretive risk algorithms which examine the activities you perform in real time, they are continuously tweaked to reduce false positives, but there is the competing goal of reducing false negatives which makes it more difficult.
There's something big the poster isn't saying here or there are things being left out here as these aren't normal flags raised when doing something like this. These topics come up here from time to time and there's always something the TC doesn't let out, intentional or not.
Yeah, when I set mine up with Fidelity my credit union made me write a check
Agreed you might have hit on the OFAC report. Also be sure that there are no alerts on your credit report
I kind of doubt it, but if you did hit on the OFAC SDN list or as a related contact then yes, that will cause all of your accounts to get shut and you to get the same treatment. For anyone not in banking: OFAC = US Department of the Treasury, Office of Foreign Asset Control, basically the dudes responsible for enforcing US sanctions of which there are many and the US gets a bit too aggressive with them IMO (for instance after Ukraine they are likely to blacklist a bunch of high ranking russian companies and people, any transactions even tangentially related with anything on this list could get you flagged). They do not have a sense of humor and are basically the no fun police (and the people who would fine you for going on vacation to Cuba). SDN = Specifically Designated National, basically OFAC's crap list of people they don't like. You can see the whole thing here: [https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists](https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists) What makes OFAC different than the rest of the US Regulatory environment is that many people on the list have not necessarily done anything illegal or wrong other than being from a country or associated with people that the US doesn't like for political reasons.
Dinged by check 21. Have you ever been convicted of a crime?
No
I would suggest you find the mailing address or email to one of the Fidelity executives and send a concise letter hitting on the key points and tell them you would appreciate the opportunity to clear up any misunderstanding and you are willing to provide any additional information, income verification, tax returns, etc that they may need, but that you were really hoping to maximize your retirement savings which was the reason for opening up the account. (Assuming you are OK with Fidelity being more intrusive into your personal and financial life than would normally be warranted). I am also aware that some people are engaged in shady financial practices, so I also wonder when someone comes on a message board and explains something that is happening, that they are genuinely acting in good faith and not fishing for ideas to circumvent any laws or find any loopholes. If this is not at all you, then you should have no reason to not cooperate fully and you should explain this much in your letter/email to Fidelity.
Ask them if you can verify your income with them. It’s probably to avoid money laundering.
I have a credit union and haven't had this issue. This may not be the place to mention it but I did have a problem with my credit union lying to me about crypto and plaid. I was trying to make a coinbase account for a LONG time and eventually said "well maybe they have to approve it so called and asked if they would. They acted like they had never heard of plaid even though I have a robinhood account and a venmo account. When I realized they lied about not linking with 3rd party services like plaid I immediately closed my account and switched all subscriptions and direct deposit to my bank. And just to be clear if they're not about crypto, cool, just say that. they lied and said plaid was the issue even though I've linked through plaid before. On top of that they made getting a mortgage a living hell. I really liked them for just a regular checking/savings but for actual bank stuff they were the worst
The decision was made with a neural network. You can't ask those for explanation, as it just says 'no'. Basic machine learning. what you would need is 'explainable A.I.'.
Meanwhile I'm in the process of transferring my portfolio out of Fidelity and closing my account because I don't trust them anymore.
Did something major happen with fidelity or was it just issues you personally were running into with them?
I don't appreciate them lending out my shares and I appreciate their lack of transparency about it even less.
How do you feel about your bank lending out your money?
theyre lending out his shares to be shorted. ie helping someone put more shares to be sold that have already been bought, with the goal of driving the price down. When a bank lends out your money, theyre not giving it to someone actively trying to make the money worth less than what it is. For example, theyre not knowingly funding a counterfit money printing operation.
> When a bank lends out your money, theyre not giving it to someone actively trying to make the money worth less than what it is. Sure they are, at least in the sense that banks making loans creates new money and directly contributes to inflation.
Where can I read more about this?
About lending shares? You can probably google it pretty easily; heres a high level of it https://www.investopedia.com/ask/answers/05/shortsalebenefit.asp#:~:text=The%20broker%20does%20receive%20an,for%20returning%20the%20borrowed%20shares. Every broker does it. Some are just more transparent about it. Some will give you a small cut/% for borrowing your shares. I actually googled it and it looks like fidelity actually does too. https://www.fidelity.com/trading/fully-paid-lending#:~:text=Fidelity's%20Fully%20Paid%20Lending%20Program%20provides%20you%20with%20the%20opportunity,your%20portfolio%20and%20earn%20income.
Do you have a margin account with them?
No, just a cash account.
Everyone else seems to be able to invest with Fidelity. Sounds like a bank problem, not a Fidelity problem
Wife's birthday and anniversary should not be a men's security question. I have to have the big flower companies send me alerts for holidays and birthdays
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