{ 7 comments… read them below or add one }

Manshu April 6, 2009 at 5:30 pm

I wouldn’t open an account with them after this. I don’t trade too often so I’d rather take my chances with someone who charges a little extra but has never goofed up.

Of course, I will never trade with any miracle money either.

Silicon Valley Blogger April 6, 2009 at 6:13 pm

Yes, I would expect that this would be a lot of people’s reactions. Zecco could sustain a hit to their business because of this, but whether it’s a short term thing is another story. If they manage to improve on things and make positive steps/changes, then great, maybe they’ll restore more confidence in their brand.

Coming from the engineering point of view — I’ve mentioned that some boo-boos like this have happened to some major sites I’ve worked on. It didn’t really make a huge dent to the business (maybe the size of the companies were a factor so they could absorb such loss of face), since people’s memories are short. The only time I can see it making a difference is if there’s a string of problems and this becomes the “last straw” so to speak. As an isolated issue, it may not be as huge a deal as it seems, but I agree that if problems persist, then no matter how cheap a service is, there won’t be enough pull here to keep the business growing.

Kristy @ Master Your Card April 6, 2009 at 8:02 pm

My opinion on this is that $*%t happens. Computers aren’t perfect – I myself caught a virus this week that sent me for a tailspin and took a week to get cleared up and off my computer. At any rate, while I think Zecco should have better protocols on checking data feeds prior to release, I also think personal accountability is important. Anyone watching the stock market lately would quickly realize that something was wrong when their accounts went from modest numbers one day to millions the next. Give me a break! You can’t tell me that those people didn’t genuinely know something was out of place. And if they did believe they’d gotten lucky, I’ve got property on Mars I’m looking to sell.

I don’t do online brokerages at all, but if I did, this incident probably wouldn’t faze me enough to make me move my money. They handled the situation quickly and efficiently, and they took care of the liability issue. While it’s unfortunate that it happened, I understand that mistakes happen. As long as it did not result in a direct loss to my accounts, then I’m good.

Michael Harr April 6, 2009 at 9:06 pm

They did well to minimize the issues and I certainly don’t think a simple mistake is worth getting fired up about. I’ve worked in financial services for more than a decade and during that time I’ve seen more errors than I’d care to count. In one case, a five figure deposit posted to the wrong account and was subsequently spent by the other party. This resulted in the company taking the hit and then pursuing remedy through the courts with the party that had a nice shopping spree “on the house”.

I have a super small account with Zecco for my own amusement and I’ve had no trouble with any of their systems. Hopefully they didn’t lose too much on the deal, as I note they had a capital infusion not too long ago. This along with the increase in commissions earlier this year begs the question of net capital requirements, doesn’t it?

jim April 7, 2009 at 9:03 am

I wonder if it was an April Fool’s joke and they didn’t think it through all the way, unfortunately letting people trade with money they didn’t have… oh well, either way Zecco has been getting a lot of bad press.

kitty April 8, 2009 at 8:06 am

This was obviously a mistake. I don’t really understand customer outrage. Anybody with a brain should have realized it is a mistake and notified Zecco immediately. I’d be much more upset if the mistake had been in the other direction – i.e. if my account showed $0 buying power when I actually had money.

It’s stupid to think of it as April Fool joke: what if the market crashed that day after a lot of people made purchases? Zecco coud’ve lost millions.

Keep in mind, this was “buying power” not the actual account value. If some of these accounts had margins, it simply meant that they were allowed to borrow millions. Only a fool or a crook would risk more money than he can repay in a lifetime. What if Zecco hadn’t noticed the mistake for a few days. Would those who made trades be responsible for margin interest?

Edward December 18, 2009 at 10:27 am

I am Zecco’s customer almost since they opened. I have to warn about one thing there. They call it “a computer glitch” but the fact that they did not fix it in the course of 3 years period since I started complaining ( and I imagine I am not the only one) speaks a lot.

I have a cash account with Zecco. Periodically there appear margin interest charges in my CASH account. Since the amounts were rather small – like, say $ 0.89 one month, $ 0.64 another, I did not notice them right away. However, I did notice them in due course and called customer service, demanding a reversal of charges. So, one month later they returned the money. The practice did not stop, however. The charges kept to appear. The largest amount that I was charged so far was $19 and a change. Now, suppose that not all customers notice small charges, that not everyone wants to bother to call and spend time on phone arguing about 34 cents charge and that, finally, when they do accept the existence of the “the glitch” and do return your money they still enjoy about 2 month interest-free use of your money. I don’t know how many accounts are there at Zecco’s. Let’s say they have 300,000 accounts. Let’s say that “the glitch” gives them opportunity to use $50.00 per account per year interest free. We are talking then about $15,000,000.00 of interest-free loan and this is only if people demanded their money back! I am looking for a different broker. 10 free trades per month do not justify the necessity to deal with people that leave you with bad taste in your mouth.
Call me Ishmael.

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