UPDATE - Clients Pay Price for Stock Errorsgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
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Clients Pay Price for Stock Errors
Online broker says most customers remain satisfied
By Greg Ip / Wall Street Journal
June 19, 2000
Ali Lee Khadivi knew he had a problem with E-Trade when he was saddled with $71,000 of a stock he didn't want. Then when the stock plunged 45 percent, he says the online broker liquidated his account to cover the loss, erasing more than $53,000 in savings.
His woes didn't end there. After Khadivi called E-Trade repeatedly for an explanation, he got a response -- from a collection agent, demanding he repay money E-Trade says he owed, or be reported to a credit-rating agency.
"It took me so long to accumulate those funds, and it was gone in no time," says Khadivi, a 48-year-old software engineer in San Jose, Calif.
E-Trade concedes the trade was an error, but says Khadivi is liable for the loss because he didn't quickly complain.
So it goes for the casualties of the online-trading revolution. The big move to online from human brokers has ushered in a parallel shift in the kinds of problems investors face, and the complaints brokers hear. Critics say online brokers' reliance on computers has at times left investors at the mercy of computer glitches and inexperienced staff.
"E-Trade (is) known for poor customer service even when its systems are working fine," Forrester Research analyst James Punishill wrote in a report after early 1999's rash of system outages. All online brokers since have improved, Punishill says, but E-Trade is "still the worst in customer service."
E-Trade maintains that its overall record is good. Unhappy customers are "a very, very small percentage of our overall business and of all the satisfied customers we do have," says spokesman Patrick Di Chiro, saying 95 percent of customers stay with E-Trade from one year to the next.
-- (Dee360Degree@aol.com), June 19, 2000