Charged anew 11,000% of comm. fees for 1900 trades, and 570% of money used to trade

Discussion in 'Retail Brokers' started by TraderManiac, May 5, 2006.

Is X justified to reclaim the $9.95 base commission fees?

  1. No, not any

    23 vote(s)
  2. No, but $0.70 per trade (IB's rate)

    0 vote(s)
  3. Yes, all

    16 vote(s)
  4. Yes, but only 50%

    5 vote(s)
  1. This is what happened. All money is in USD, although I am in Canada and this involves one of the largest Canadian direct access brokers, which I will refer to as X here.

    My X broker fees lost me 60% ($12,000) of my money. I was peed off, and wanted to leave X right away. I had about $1000 left to trade with, aside from about $2000 I designated for long term holds. I was outraged that I was still being charged at least $9.95 per trade. I contact X and make a big fuss about its commission fees. I give them the works, making fun of their name and everything. Patrick, from X, in turn tries to convince me that X is sympathetic to people like myself, and provides some trades as “low as $1 per trade (100 shares).” I tell him to stick it! Because I thought he didn’t respond within the time I stipulated.

    Unfortunately, my application with Interactive Brokers (IB), which charges a minimum of 0.70 per trade, did not go through because of an incomplete application. I was getting antsy and decided to take Patrick up on his offer while I send the necessary documents to IB. So I call Patrick, and tell him I will take what he was willing to give me. It took a little prodding, but he finally agreed to give me it.

    Patrick looked up and down my account at my holdings, and I got the impression he was not impressed. He thinks awhile, and gives me his offer: In any particular day, I will get charged the base commission fee of $9.95 the first time I buy or sell a stock; for all other trades within the same stock and in the same day, I will get charged on a per-share basis, or 1¢ per share. I say to him, “I’ll take it, until I can move to a more accommodating broker.” I mean being charged $9.95 three or more times every day on $1000 does not sound like a good deal. He goes out back, mumbles a bit with somebody, and then comes back and says I’m good to go.

    Immediately after my phone conversation with Patrick, I make a trade just to see what the heck the arrangement was, because it is pretty difficult to understand. I only get charged 1¢ per share. I make two or three more trades the same day, and I only get charged 1¢ per share; no base commission fee charges. I supposed that the base commission fee charges are deferred to the end of the day. However, they were not, and I get suspicious the second day when I was still being charged only 1¢ per share. On the third day, an account administrator emails me requesting a signed letter stating I do not wish to receive any statements or confirms.

    My suspicion went away on the third day, because it seemed like the account administrator looked into my account, and saw nothing wrong. Thus, I inferred Patrick wanted to keep a customer, and decided to waive the base commission fees, because they were too much for me. It made sense to me: I get to happily trade at will, and X keeps a money maker indefinitely.

    Two weeks since being setup with the 1¢ per share commission fees, the fees begin to look too good to give up, and I scrap my plan to transfer to IB. Since it has been two weeks, and countless trades, there was no question in my mind that X was aware of charging me 1¢ per share commission fees. Therefore, I saw no reason why I shouldn’t continue with X, and that is what I did.

    For 44 days I was charged 1¢ per share commission fees. During that time, I had made 1900 trades, the average trade having a value of $90 and for 3 shares. No, I did not make any money even with the very low commission fees. I traded with about $450 per day. Furthermore, I made about two or three contacts with X that required X to look into my account. Everything seemed okay.

    Forty-four day on with the 1¢ per share charges, the day I was going to give up on this stupidity, I get contacted by Patrick. He says he’s embarrassed to tell me I was being charged incorrectly due to a system error. I tell him it’s okay (that my commission fees will become higher,) because I wasn’t making any money anyway. I ask him to confirm I will not be charged again for the trades, and he says the issue will be resolved in four days. Now I get worried; sh.t I didn’t trade under the assumption I was going to be charged $9.95 fees: I was being charged 1¢ per share!

    Four days go by, and I am good. Relief sets in. Not for long though. Two days later, fifty days after the fee change, Patrick gives me the disturbing news that I have been charged $6,250 for 1900 trades according to the offer he provided me before I made the trades. Naturally, I go berserk: I have rights as a consumer; why am I being penalized for somebody else’s mistake; you are being unfair; you are not being good corporate citizens; blah; blah; blah. “Sorry…,” he says. “I don’t enjoy telling you this thing,” he says. He didn’t sound sorry, but instead sounded like he was enjoying it: enjoying the power he had over the person who had said very mean things about his company. The more I made a ruckus, the more options he withdrew from the table it seemed.

    The $6,250 charge is extravagant anyway you look at it. First, it represents a charge of $1.10 per share as opposed to the 1¢ per share I was initially given. Second it is a charge of 570% of the money I was using during the 44 days. How dear they forget to charge me that much? And then have the gull to reclaim the charges that were not charged due to their own mistake? There was no reservation of charges, or indications that charges would be deferred.

    X says I was aware that I wasn’t being charged the base commission fees, and thus, I have to pay them. It also says the charges were made correctly, although the base commission fees were charged after the transaction dates. What kind of conniving, deceptive, and misleading business practices is this company up to? Furthermore, the charges were reclaimed in a timely manner, according to X. How can charging me 11,000% of the initial charges weeks after the transaction dates ever be timely? How can forgetting to charge me 570% of my money be considered timely?

    Heck Interactive Brokers would have only charged me $0.70 for each of the 1900 trades.

    I want your opinion. What do you guys think I should do? And what do you guys think of X?
  2. Htrader

    Htrader Guest

    The first thing you should do is immediately withdraw all the money you have in the account, unless they've taken it already.

    Start recording your phone conversations and try to get Patrick or another rep to verbally confirm parts of your story.
  3. i think you are an idiot...

    anyone who agrees to not look at their confirms on a daily basis is incredibly stupid...

    trust no one... get it in writing...

    if it looks to good to be true it probably is...

    "a fool and his money are soon parted"...

    i just can't believe the stuff i see on this board...
  4. Too late. They liquidated my stocks, and now I am about $4,000 in debt to them.

    X is not denying that it happened as I stated. There is no dispute in that. Most of the events can be proven by emails, which I still have. However, I wish I have records of the phone conversations.

    On the confirms side, all the statements and trade confirmations show the 1¢ per share charges. Not only that, the 1¢ per share charges are shown in many records of the company, including its software.
  5. Yes, this situation is bizarre for me too, but these are the sorts of incidences we'll encounter in this new age of technology.
  6. I'll ask my mentor for you, if he is available, he is a 20 year Canadian day trader. I am sure there is a regulatory agency that will be on their ass if this is as you say.
  7. my mentor is a 20 year old?? OMG, this site is too funny!
  8. Yeah but without Dumb Money like his, where would we be. Trader Maniac ... please fund your new account ASAP.
  9. This is the best advice I can give. Move on and forget about it. When you made an agreement in your negotiations that was it. You changed your habits thinking you got something other than you agreed to. But in fact you did not. This was ALL YOU...

    now you can write letters...or try arbitration....but in the end you will save time and money if you just :

    pay the 4k or it may get more expensive....

    Here...its like this.... just because you do not get a credit card bill....does not mean that you do not owe the money...

  10. Typo, no he has been trading about 20 years. Good catch though :D
    #10     May 5, 2006