Scottrade arrogance

[Anonymous]

Was looking for an online broker, settled with e-trade and scottrade for a short-term jaunt into the stock market.  Still looking for an IRA investor (thinking Fidelity), but I digress.

Expressly told both etrade & scottrade I wanted NO-MARGIN accounts.  Strictly cash only.

Scottrade pulls a hard credit report, causes a 3-point ding.  I am not a happy camper.

I send an email saying I was upset and because of the hard pull I will be using a competitor for the short-term.

Their response?  Completely defending their position.   "According to section 2, subsection X, paragraph 3, clause 4...etc. etc.  of the form, we are allowed to do a hard pull".  

After reading this, my "short-term" use of a competitor instantly became "LONG term" use.

Just wondering if anyone else has had these problems with online brokers, even for no-margin accounts, thanks.

Dan

[llecs]

Scottrade does pull hard inquiries. Seems like others are doing it too.

When you fund your account, or at least when I fund mine through E-Trade, I am transferring cash from my checking to my brokerage account. The credit risk comes in when you transfer that money and it bounces. When the money transfer into my brokerage account, the cash becomes available before it even clears my bank account. So, if the cash is available, I invest it, the deposit bounces, and then my E-trade would be out $$$.

[Anonymous]

I, too, noticed e-trade said it would take a full week (5 business days) to clear the transfer, yet the full amount was "available" in my brokerage account immediately.  I decided not to be impulsive and instead waited the full week before investing.  They got to keep my money for a full week, using it for short-term borrowing...one more way to use my money (the $9 trades aren't their only source of funding).

I also noticed when buying shares that they make money off both the trade fee as well as the spread.  For example, stocks that were posted at $10.00 market were bought at bids of $10.50 or more, so basically I "lost" money until the stock value goes up to $10.50...and even then, the stocks are sold at a spread BELOW market value (selll $10.00 stock at $9.50).  They get you both ways, but I suppose it keeps day-traders at bay, attempting to keep investors for the long-term (and it also helps their Mercedes payments).

Thanks,

Dan

[Anonymous]

Just as an FYI I opened up an account with TD Ameritrade this year and they didn't pull my credit to establish the account.

[Anonymous]

When I tried to open a Roth IRA with Scottrade, it asked my permission to run my credit. I was informed that it would be a hard pull so I declined. 

[Anonymous]

Scottrade uses Equifax for the hard pull.  They have great service, and I felt like it was worth the pull, it won't hurt after 12mo anyways.  The broker I spoke with said that as long as the score is above 500 they will accept membership, FYI.

[Anonymous]

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@Anonymous wrote:

I also noticed when buying shares that they make money off both the trade fee as well as the spread.  For example, stocks that were posted at $10.00 market were bought at bids of $10.50 or more, so basically I "lost" money until the stock value goes up to $10.50...and even then, the stocks are sold at a spread BELOW market value (selll $10.00 stock at $9.50).  They get you both ways, but I suppose it keeps day-traders at bay, attempting to keep investors for the long-term (and it also helps their Mercedes payments).

Thanks,

Dan

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It's called a Bid-Ask spread and every broker has it. Unless you're buying something obscure, it should only be a few cents.  What stock had a spread of $1.00?

The interface isn't the best, but you should look into Zecco.  They don't charge for trades as long as you have at least $2,500 in there.

[Miner]

Yep, Scottrade does a hard pull when you open a cash only account.  However, it isn't that unusuall and nothing to get that upset about.  I had this happen to me exactly a year ago.  You'll get the points back pretty quick.  Not opening the account after you've already paid for the hard pull (in points) seems pointless though unless you got them to reverse it? 

Have you tried opening a checking account at a new bank these days?  If you don't already have an account, many banks will hard pull you for that also.  This is the age we now live in.

Scottstrade's tools aren't bad and their prices are good.  Their ScottradeElite trading software for accounts >$25k is pretty good.  My past experiences at TD Ameritrade with both a trading account and my rollover 401ks was also good and they are cheaper then Fidelity.

[Anonymous]

I totally agree with Gbreadman....I briefly considered opening a trading account with Scottrade but declined when I was informed they would be doing a hardpull credit check. Am I glad I asked in advance. They certainly didn't volunteer the info. I had to drag it out of them!

E-Trade also told me they definitely might do a hardpull and couldn't guarantee it one way or another. One phone rep even told me to go ahead and open the account and not to worry about it since it was a fairly rare event in his experience. And that deep-sixed that trading firm as far as I'm concerned since I won't play dice with my credit scores.

TradeKing was the fallback outfit for me. They flat out promised no hardpull credit check, gave me 50 bucks bonus for the first trade just for signing up, and their commissions were about the cheapest you'll find on the net.

I find it very consumer unfriendly to take my money and then ding my FICO score! And while this shouldn't be the sole factor in deciding which trading firm to use, it's a definite consideration with me. I simply refuse to do business with any firm that won't accept a soft pull inquiry in place of a hardpull. They can always get the very same information but in a more consumer friendly fashion.  

Sure, I'll make exceptions and swallow a hardpull for mortgage banks but very few other lenders or businesses.

But I'll kick and scream about it the whole time just for fun in hopes of getting them to back down. It can't ever hurt.

Cato 

Fico Equifax:  681 Sept 2007

Fico Equifax:  708  July  2008

Fico Equifax:  748  Sept 2008  And climbing ever so slowly but surely.

Message Edited by cato on 11-03-2008 05:19 PM