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Fidelity customers with certain types of accounts have noticed onerous deposit limits in recent days. In some cases, some people find that their deposits are on hold for several weeks.
What’s happening: The financial services company has recently seen a spike in fraudulent activity and “needs us to take immediate steps to address the issue,” a spokesperson said in an email. Although Fidelity hasn’t confirmed what these actions specifically mean, affected Reddit users say the new fraud prevention measures are too aggressive and have personal experiences that are frustrating. Reporting.
The fraud scheme in question went viral earlier this month, sometimes under the hashtag #fidelityboyz. One post, which has more than 4,500 likes on Instagram, shows several men wearing Fidelity T-shirts tossing large sums of cash into the air.
This has similarities to the “unlimited funds problem” that engulfed Chase Bank just a few weeks ago.
The “fidelityboyz” trend basically promised customers hacks to earn free cash. This involved instantly withdrawing funds via fake checks before Fidelity actually cleared the deposit. In reality, this is just a check scam, and those who attempt this can face serious consequences.
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Meanwhile, the type of account affected is called a Cash Management Account (CMA). These are interest-bearing accounts with the ability to pay bills, cash out, and transfer checks. Fidelity calls it “an alternative to traditional banking” on its website.
However, customers are now reporting on forums that attempts to make legitimate transfers or check deposits were put on hold, preventing them from accessing the funds they needed.
On Friday, the Wall Street Journal reported that Fidelity’s deposit limits have been lowered from $100,000 to $1,000 in some cases, adding that fraud concerns are specifically related to mobile app check deposits. Users on Reddit claim they found their electronic fund transfers on hold when they tried to withdraw funds from other banks to their Fidelity accounts.
“I’m really interested in a CMA account, but I can’t wait to transfer money even though it takes weeks,” one user wrote. Another reported, “Fidelity has two deposits until October 11th. There are bills to pay.”
Fidelity’s stance is to focus on preventing fraud.
“We recently identified individuals attempting to use Fidelity accounts to commit fraud. We do not tolerate illegal activity of any kind,” the spokesperson said. Your information, accounts, and assets have been compromised. ”
In addition to social media, the Fidelity scam was also popular among scammers on the messaging app Telegram, according to scam blog FrankonFraud. However, unlike Chase’s “Glitch,” this plan did not involve raiding ATMs for cash.
“Since Fidelity does not have an ATM, the scheme appears to focus on depositing fake or altered checks through a mobile app, often into newly opened accounts.” says FrankonFraud’s blog post. This is to get the money out quickly. ”
Fidelity’s new safeguards appear to have largely stopped the illegal activity. The problem now is that some customers, ostensibly doing nothing wrong, are being told they have to wait until they can withdraw or invest the funds that are subject to the hold. . The company has not disclosed how it plans to resolve this issue.
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