Robinhood announces expanded customer support
Robinhood, the investing platform at the center of last month's stock market frenzy, announced Monday that it had added a live customer phone line and other customer support features. The news came just weeks after a CBS News investigation detailed customer service practices that left users to navigate high-risk trades by themselves.
In one case, a family says ineffective customer support may have even contributed to the death of their son.
Alex Kearns died last year at age 20, mistakenly believing he'd owed nearly $750,000 trading a sophisticated financial instrument called options on Robinhood. In a lawsuit reported first by CBS News, his family accused Robinhood of wrongful death, negligent infliction of emotional distress and unfair business practices.
The platform announced a host of changes Monday to their customer support systems, including expanded live phone support for customers dealing with account security. The company also added a feature for customers trading options, the instrument Alex Kearns traded before his death, to request to speak on the phone with a registered financial representative at Robinhood for help in certain parts of the trading process.
"We want to make sure we're there for customers, especially in time-sensitive situations," the company said in a blog post. "Over the past several months, we've rolled out phone support for options issues through a new in-app contact feature."
In the hours before his death, the lawsuit said, Kearns' Robinhood account displayed a negative balance of more than $700,000. Kearns emailed Robinhood's customer service address three times to ask for help understanding what had happened, and whether he could still offset the losses with another trade. In response, he received an automated reply.
His family says he became increasingly panicked about his perceived debt, and took his own life hours later. More than a full day after he sent three emails to the company, Robinhood sent another automated message suggesting he didn't owe any money at all.
His parents told CBS News they believe their son would still be alive today if Robinhood had answered his repeated requests for help on their customer service platform.
"He just wanted an answer," his mother, Dorothy Kearns said. His father, Dan, added, "He just needed a little help."
While Robinhood had previously provided customers with a support phone line, former Robinhood employees told CBS News earlier this month that the phone line was riddled with problems: customer service agents without qualifications to offer financial advice, licensed brokers too busy to help and pleas from customers that went unanswered. Sources close to the matter told CBS News the company eventually terminated its customer phone line because the company couldn't keep up with the volume of calls.
In 2020, customers like Alex Kearns had no customer help phone number to call.
Representative Sean Casten, a Democrat from Illinois, questioned Robinhood CEO Vlad Tenev about the company's customer support in a hearing before the House Committee on Financial Services last week. He asked Tenev to listen as he called the platform's telephone helpline, which plays a 12-second pre-recorded message instructing callers to visit the Robinhood app or website, then hangs up.
"While I'm glad Robinhood is making improvements to customer support, I remain concerned that the announced changes are insufficient and could distract from the real problems that persist," Casten said in a statement to CBS News.
Casten's office will continue to look at a number of issues surrounding Robinhood, including which users will be limited from using phone support, as well as what they say is inadequate transparency around how the company makes money on individual trades.
In Monday's blog post, the company also said it had more than tripled the size of its full-time customer support team in 2020, and planned to more than double the number of full-time registered reps at Robinhood throughout 2021.
Since Alex Kearns' death, Robinhood told CBS News it had "revised experience requirements" for customers seeking riskier types of options, but CBS News confirmed earlier this month just how easy it was to get approved for basic options trading on the app, by simply setting your investing experience level to "not much."
Dan Kearns said the platform's safety checks weren't strong enough. "How are those guardrails? How does that — how does that stop an 18-year-old from making risky trades that they don't really understand?"
An attorney for the Kearns family said, "Although too late to help Alex, we were pleased to see Robinhood increasing its investment in providing live customer support for options investors in the position Alex found himself in last June. We look forward to evaluating whether those changes to customer support are sufficient as we proceed with discovery in the Kearns family's lawsuit. We remain disappointed that Robinhood hasn't done more to tighten its controls over approvals for options trading."
Security officials blame federal agencies for poor intelligence in lead-up to Capitol riot
Former PGA Tour player Sir Nick Faldo reacts to Tiger Woods' car accident
