The Big Problem With Online Banks—and What to Do About It

Digital banks offer lots of benefits but fall short on customer service. Consumer Reports explains how to get a bank's attention.

illustration of bank with dollar bill and digital devices around it Illustration: Israel Vargas

Online-only banks have become a popular alternative to traditional banks—particularly with young people and with minorities. 

That’s because digital banks, where everything is conducted through a smartphone app, usually offer more attractive options, such as zero fees (including the popular no overdraft fee), early pay options for direct deposit accounts, and higher interest rates on checking and savings accounts. 

There’s one big drawback, however. Many of these online banks have almost no customer service. That includes a person you can contact to resolve any issue you have. Instead, most offer only a chatbox or email, and there’s no guarantee that anyone will respond. That means consumers are often unable to get an error or dispute fixed—or even access their own money.

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That’s what happened to James Kopps, a 35-year-old account manager for small group health insurance from Milwaukee. He opened an account with Chime, the biggest online-only bank, back in January with a $1,700 fourth-quarter bonus he had just earned. 

But less than a week later, he logged on to find his account had been suspended. Kopps couldn’t access his money for six months despite numerous attempts to contact Chime’s customer service.

Kopps isn’t alone. A recent report in ProPublica described how other Chime customers were being frozen out of their accounts. Like Kopps, they got no explanation or real support from the company—leaving them in the lurch, unable to access needed funds. The head of the Senate Banking Committee has asked the Consumer Financial Protection Bureau to look into the matter.

“When consumers open up bank accounts, they naturally expect to be able to quickly get access to their own money when they need it,” says Chuck Bell, a Consumer Reports financial policy advocate. “Without fast redress by the bank, customers could very likely be unable to pay for essential needs like food, housing, and transportation, and even face dire conditions like hunger and eviction.”

Online banks say customer service is important to them and they’re trying to beef up those operations, including increased access to human agents.

“As our member community has grown, we’ve made it a top priority to scale our support capabilities along with it,” says Gabe Madway, Chime’s head of communications. He says that the company will offer full 24/7 coverage 365 days a year “in a matter of weeks.”

As for Kopps, he finally got his account unlocked after Consumer Reports contacted Chime. But he says he’s “done” with online banks.

“I’m never opening a bank account where there isn’t a place I can walk into and make somebody talk to me,” Kopps vows.

So if you’re thinking of opening an online bank account, be aware that reaching someone at the company may not be easy. 

“Often, when you’re tempted to use a fintech product, customer service is going to be one of the biggest shortfalls,” says Lauren Saunders, associate director at the National Consumer Law Center.

But if you already have an online account and can’t get an issue resolved, here are some tips to help you get through.

Contact the CEO’s Office

Don’t expect to get the CEO’s direct phone number or email address. But you can probably find the company’s main number online. Once you get someone on the line, follow these steps, says Shep Hyken, a customer service expert who works with companies to build loyal customer relationships.

  • Don’t ask to speak to the CEO directly. Instead, ask to speak to the office of the CEO. The chief executive has a team to take care of problems, so most of the time, somebody will respond.
  • Introduce yourself and use this script: Hi, my name is ____. Originally I wanted to talk to (the CEO’s name), but I thought I would just speak to somebody in their office. Maybe you can help me with this problem.
  • Explain your situation, but no matter how frustrated and angry you might be, it’s important to be nice. Don’t put the person on the defensive; you want them on your side. If they’re properly trained or they understand the situation, they’ll show you empathy and help you with your problem.

Use Social Mediathe Right Way

Some people rant on social media even before they pick up the phone. That’s because they feel it’s the quickest way to get attention. However, Hyken recommends that you take a less confrontational approach—especially if it’s your first attempt to reach the company.

  • Send a direct message to the company on Twitter instead of a public tweet. “Give the company the opportunity to fix the issue before you make a scene on social media,” Hyken says. “When a company sees you’re direct messaging them through a social channel, they know you have the ability to not direct message them, and sometimes they appreciate that you did it this way,” he adds. “It may elicit a quicker, more helpful response.”
  • Sending a direct message also helps you avoid scams. Some fraudsters may respond to your public tweet by saying they’re a company representative when all they’re trying to do is steal your money.
  • Don’t threaten the company in your DM. Simply say, “I thought the best way to reach you would be through social media, and I thought, even better would be to direct message you, so I can get a quicker response,” Hyken says.
  • Don’t plan on getting an immediate response. “Expect a response within a day or so,” Hyken says.

Report a Problem to the Better Business Bureau

Although the BBB may not have the teeth to force a company to resolve an issue, being considered a good or bad company by the BBB carries a lot of weight in the marketplace.

If you feel that you’ve gotten bad service, make sure to report it to the BBB. And before you choose a service, it’s always a good habit to check the BBB website to see what consumers are saying about the company you’re planning to use.

Contact Regulators

The Consumer Financial Protection Bureau is in charge of enforcing banking and fintech consumer fairness practices. Consumers who feel wronged by their financial institution—whether it’s a fintech start-up or a traditional brick-and-mortar financial services company—can file a complaint using the Consumer Complaint Database or by calling 855-411-2372. 

“Companies have provided timely responses to 98 percent of the more than 2.4 million complaints sent to them for response since the CFPB began accepting complaints in 2011,” says Raul Cisneros, a public affairs specialist with the CFPB.

Before you get started, here are some of the things you’ll need to file your complaint: 

  • Dates, amounts, documents, and other details about your complaint. Make sure to scan your documents beforehand so that they can be easily attached to the digital file you create.
  • Include all the information you can, because you generally can’t submit a second complaint about the same problem, according to the CFPB.
  • The CFPB will forward your complaint and any documents you provide to the company and work to get you a response—generally within 15 days.
  • If the CFPB finds that another government agency would be better able to assist, it will forward your complaint to it and let you know.
  • If the CFPB complaint doesn’t result in any response from the company, you should also contact your state’s Attorney General’s Office. California Residents can also file complaints with the California Department of Financial Protection and Innovation.

Switch Banks

If you’re unhappy with an online bank’s customer service, simply close your account and go elsewhere. “With some of these digital companies, if I can’t reach human help, when the issue is over, as soon as I find a way, I’d switch,” says Hyken.

But closing a financial account presents its own headaches.

“You’ve got to close an account and then open another account, and sometimes the path of least resistance is to just put up with it,” Hyken says. “But consumers are getting smarter today, and their expectations are higher. Companies out there who aren’t responding appropriately or aren’t responding in a timely matter, or don’t have a way to get to a human, should consider this a warning,” Hyken says.

Image of Octavio Blanco, editor at CR with Money CIA

Octavio Blanco

My mission: To write stories that broaden readers' horizons and offer new solutions they can apply to their lives. Who I write for: My family, my friends, my neighbors, myself, and—most important—you. My passions: Music, art, coffee, cheese, good TV, and riding my electric bike (for now). Find me on Twitter: @octavionyc