If you closed a Chime checking or savings account since Jan. 1, 2018, and didn’t get your account balance within 14 days, the fintech company may owe you money -- up to $150.
Chime customers who closed accounts waited three months or longer to get their refund, according to the Consumer Financial Protection Bureau. The bureau issued an order that San Francisco-based Chime pay $3.25 million to the CFPB victim’s relief fund as a penalty and at least $1.3 million to affected customers -- totaling over $4.5 million.
“Chime’s customers had to wait weeks or months for access to their own money and were forced to use alternative funds to cover their essential expenses,” CFPB Director Rohit Chopra said in a press release.
Here’s what the violation means for you and what one of our CNET Money experts wants you to know.
What did Chime do wrong?
According to the CFPB, Chime was supposed to automatically refund money from closed checking and savings accounts by check if the remaining balance was more than $1. However, in thousands of instances, Chime failed to refund customers within 14 days and sometimes as long as 90 days.
A Chime spokesperson said that “the majority of the delayed refunds were caused by a configuration error with a third-party vendor during 2020 and 2021.”
Those delays could’ve created a critical financial hardship if someone needed the money in the account to pay for basic living expenses like groceries and housing, the CFPB noted. For some folks, the only alternative might’ve been to rely on payday loans or to carry a credit card balance, both of which can involve exorbitantly high interest rates.
How much does Chime owe you?
If you had a balance less than or equal to $10 and you didn’t receive your refund within 14 days of closing the account, Chime will refund you $25. If you had a balance of more than $10, your refund will be calculated at a 30% annual rate for the time between your refund’s due date and the day you actually received your refund, or $150.
Chime has 10 days to set up a $1.3 million fund for issuing the refunds. You should expect to receive a letter in the mail from Chime if you qualify.
If you’ve moved since closing your Chime checking or savings account and believe you qualify for a payout, it’s best to update your mailing address by contacting Chime’s customer service at 844-244-6363. Within the next seven days, the company is required to publish a telephone number, email and postal addresses specifically to field questions regarding the refund.
It’s worth noting that Chime isn’t a bank; instead, it partners with other banks to offer its products and services. However, its accounts are held by one of two partner banks covered by the Federal Deposit Insurance Corp.
How to protect yourself from future banking woes
“To mediate risk like the one that has occurred with Chime, I would definitely advise people to consider having emergency savings at a separate bank from where they do their day-to-day banking,” said Bola Sokunbi, a Certified Financial Education Instructor and member of CNET Money’s Expert Review Board.
You may also consider having some money on a preloaded or prepaid card to have access to funds in case of a banking mishap or emergency, she added.
If you haven’t already started saving for the unforeseen, try to start now. Sokunbi recommends creating a line item in your budget to put money toward savings each time you get paid. “Ideally, you want to aim to save at least three to six months of your core or essential living expenses,” she said. That should include housing, transportation, core utilities and medication for you and your household.
Even saving a small amount can help bridge the gap if there’s a temporary issue with your current bank. To be on the safe side, consider keeping this money at a separate high-yield savings account that lets you earn interest and offers easy access to your money.
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