Update 11/18/20: Multiple readers reporting getting all their money transferred now to their bank, including interest. Not sure if it’s resolved for everyone yet.
Update 11/18/20: Beam is now being sued by the FTC.
Update 11/10/20: there’s a new CNBC article stating that Beam now officially has a lawsuit against them, brought by the partner banks who feel they are being unfairly blamed for this fiasco. Notably, “The suit says that all $2.4 million of the customer deposits is now in the custody account at Huntington National Bank, but HNB does not know, and has no way to know, the identity of the Beam customers to whom these funds belong or the amount of these funds owed to each Beam customer.” Hopefully that means all of the money is still around, at least, and will eventually sort itself out.
Original Post 10/28/20:
We’ve written about Beam Financial who launched a while back with the ability to earn up to 7% APY on your savings by referring friends and taking part in various activities. We wrote about them in 2017, then in 2018, then in 2019.
A few readers reached out over the past weeks about having issues with Beam not allowing them to withdraw their money. I continued assuming that this was some limited issue that a few people were having until today – CNBC ran a long story today on Beam indicating with many people running into the same issue.
Beam is not a bank, but they are linked with FDIC banks, and when you make a deposit they sweep your funds into one of those banks. So, allegedly, the missing funds should be sitting in an FDIC bank account somewhere, and Beam is just not processing the withdrawals. It’s possible they don’t do the sweep correctly, and then there’s real money at stake.
Further, the banks which were previously listed on the Beam site are no longer listed there, and CNBC even heard directly from some of the banks that they have no relationship with Beam.
You can read the long article on CNBC, but in short, it looks like a bad situation. The good nugget is that CNBC did communicate with Beam who acknowledged the issue and continued to say that it’s just a matter of time for them to sort out some issues they are having.
This is all making me more nervous about using any one of these many fintech companies who are ‘affiliated with FDIC banks’ since it’s hard to track that the funds are reaching the bank, and even if they are, it’s up the companies to process the withdrawals in a timely manner. Maybe these fintechs can improve to have actual bank statements from the holding bank, but they probably wouldn’t want to do that.