Despite being a customer for twelve years and having an average balance for the past three years of more than $20,000.00 in securities with E-Trade Securities in two separate joint accounts and an individual account, E-Trade, after a change of their account policies, charged me $40.00 on three separate occassions on two of the accounts that had separate balances less than $10,000.00 each. This was rather tacky, but it isn't the major problem. The major problem is they did this without any notice.
I am a casual investor and let my portfolio ride for long periods of time. I'd opened an account with E-Trade to allow me to buy and sell when it was convenient for me. During the course of the twelve years that I've had an account with E-Trade, they cynically changed their policy to let them bill fallow accounts (i.E. If each separate account is below $10,000.00 value and your total portfolio value falls below $20,000.00, each account with a value below $10,000.00 will incur a fee of $40.00 per quarter. Slimy, but an allowable business practice.
The rip-off is that E-Trade doesn't inform you that you have incurred these charges and they make no record of your account balances to show that they legitimately charged your account $40.00 per account, per incidence. Unless you are regularly checking your cash entry in your account balances (which you may not be inclined to do if your account is comprised solely of securities), you will not see that you have ever been charged. And, because you have not been informed of the charges, you lose the income tax deduction that they should give you. Moreover, they have especially slimy practices for one off traders and accounts with multiple tenants.
If you open an account with E-Trade, as my sister and my wife did at my recommendation, for the sole purpose of liquidating stock in a single transaction (as both did), E-Trade leaves the zero balance account open so they can charge the $40.00 fee each quarter. If you unwittingly put more stock or money with them at a later date, they will then deduct these spurious fees from your next trade or deposit. If you were a joint tenant on a security (as I was on my sister's share of stocks inherited from our father) that the other tenant liquidates, E-Trade will link the empty account to your account, so that they might hold you, too, liable for the fees the empty account accrues each quarter, even though you can't even view this account and get no notification of the fees.
One can only conclude that E-Trade initiated these policies to fleece smaller investers. There is no better advertisement for Ameritrade of which I can conceive.
I hope some mass-tort firm looking for revenue will go after E-Trade on this issue as I am eager to join any class action suit against these slimy ripoff artists.
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