Posted by William Charles on February 22, 2019
Deals

Published on February 22nd, 2019 | by William Charles

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Varo Money Banning Users For Sharing Referrals

Yesterday we posted about a new Varo Money deal where new users could get $50 for signing up and completing a direct deposit and existing users would get $50 for referring them. I just received an e-mail from Varo Money stating that they will be banning all users that share their links on third party sites, and also banning anybody who uses a link shared on a third party site. The update terms state (emphasis mine):

For example: Eligibility is based on individual Members inviting only personal friends, family, and known acquaintances. Attempts to generate referral activity by posting the Member’s unique link on third party social media, blog, or other similar websites can result in termination of Member eligibility.

They also said they have already banned anybody who shared their link. I would have thought a warning would have been sufficient given the terms are new and users likely didn’t know they were breaking the new rules, but it looks like Varo Money has gone in the complete other direction.

 



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JM
JM

lol, ban people for increasing their user base. Ok.

Chris
Chris

Seems like a poor decision on their end. Strange.

JR
JR

might be a good idea to remove comments from the OG varo referral page to protect users. thanks doc

arizonapv
arizonapv

William Charles what about making the varo referral page a protected post to protect people’s identity?

Grant

I didn’t sign up yesterday and this customer unfriendly move doesn’t make me want to join now. Bad move Varo.

sam
sam

I thought the same thing, but it makes me want to take their money more now..

PH
PH

So they include icons to share your link on Facebook and Twitter prominently in the email where they tell us to share our link, but then at the end of the T&C they say this is a violation to post to social media and blogs? They are kind of contradicting themselves…

MoreSun
MoreSun

Literally my favorite part of this. ROFL

PH
PH

I have questions about their business model. LOL

Snorlax
Snorlax

Honestly, a lot of these referral links have similar clauses, though enforcement against people who have 1-2 referrals is unheard of.

For example, Uber:

>Uber wants you to share your referral code and earn Referral Rewards, but referral codes must be used only for personal and non-commercial purposes. This means that you can share your referral code only with people you know. You agree that you will not:… Duplicate, sell, or transfer your referral code in any manner or make it available to the general public (such as by printing it on business cards; posting it on a coupon website, job website [or using it as part of a job application], Amazon, EBay, Fiverr, Craigslist, RetailMeNot, Reddit, Wikipedia; or using paid social media or paid search);

tribesman55
tribesman55

Sh*tty bank good riddance.

Emporio
Emporio

I agree with your sentiment tribesman55 tribesman55, though I wouldn’t necessarily label Varo as a “bank”. Varo only has CONDITIONAL approval for a de nova national bank charter from the Office of the Comptroller of the Currency (OCC). It’s also not a member FDIC but rather has deposit insurance through a secondary bank. One reason Varo is trying to grow so quickly through referrals is that in order to be granted a bank charter, it has to raise $104 million in capital by Sept. 2019.

PH
PH

Interesting, so do you know what happens if they don’t raise the $104M by the Sept. 2019 date?

Ann
Ann

They continue to rely on less-profitable contracts with actual banks like they are currently, I’d guess.

Emporio
Emporio

Yes, that’s a possibility as well. The Bancorp Bank, which is FDIC insured, holds all Varo’s deposits and pays Varo an undisclosed amount of interest for doing so.

Emporio
Emporio

PH I would assume that the Varo founders would cash out their depositor’s capital for Bitcoin and flee to Russia!

In all seriousness Varo would be denied a bank charter if they fail to satisfy the requirements set forth in their conditional charter. In that case, they would not be able to lend money like a regular bank. I would think lending is core to their business model (assuming they have one). My bet is that Varo would then shutter its virtual doors and close out all deposit accounts. The OCC is skeptical (rightly so in my opinion) of FINTECH startups which is why Varo must meet additional requirements to obtain what’s known as a “de nova” bank charter. I have a masters in finance and took the OCC examiner exam so I am somewhat familiar with this process.

Joe
Joe

Good stuff!

tribesman55
tribesman55

Did you pass and join the OCC? I have a BS in finance and interviewed with them after graduating but they didn’t accept me. All for the best I guess cause I ended up being a stay at home dad lol!

Emporio
Emporio

That’s awesome you interviewed with the OCC! It can be a brutal and lonely job the first years. The OCC recruitment strategy is to target recent college grads knowing that it can dump the least desirable monitoring of rural banks on these newbies while making career agents out of many of them. While I passed the OCC exam, I was told that I wasn’t their typical candidate since I was older and held an advanced degree. I am a Finance geek so it was fun to take the exam and learn about the OCC. But like you it turned out for the best that I didn’t become an agent.

PH
PH

Interesting stuff; thanks for the extended answer. Finance geek as well, but only with a bachelors, and not much knowledge in this particular area. I’m fairly skeptical of the FINTECH startups out there (too many, questionable buz models, etc.), but I’m happy to take advantage of the incentives that they offer.

Drivesabrowntruck
Drivesabrowntruck

Guess they hired some Marriott marketing people to help with their branding.

JT
JT

Quickest account closure process I’ve experienced. I had this big spiel all ready to go about the referral BS, but he didn’t even ask me why haha.

Jim W.
Jim W.

This is one of those banks where I wouldn’t even waste my time calling to close. They’ll figure it out after a year or two of my doing nothing, all on their own

JT
JT

Always be closing.

raekwon
raekwon

This… makes very little sense, particularly when (as stated in another comment) links to share referrals on both Facebook and Twitter are **in the email that THEY sent out**.

My referral link still *appears* to be working, but it could be that if anyone signs up with it, I still won’t get the bonus. Just a silly move on their part.

John
John

Yike. Well I used a referral link so now I wont finish opening an account.

Trippy
Trippy

I just mailed in to close my account.

P
P

LOL. Then how am I supposed to get a referral link so I can sign up

Ann
Ann

If one of your actual “personal friends, family, and known acquaintances” isn’t a member already, they don’t want you to have one, apparently.

wilsonhammer
wilsonhammer

Guess I’m closing my account then. Thanks for the nudge Varo!

MoreSun
MoreSun

Crap. Can’t say the fine print doesn’t say not to share but whatever. Closing my account out as well.

Ann
Ann

“Can’t say the fine print doesn’t say not to share”

But it didn’t, they just added that after the fact.

MoreSun
MoreSun

Oh! Wow! Schmucks.

MoreSun
MoreSun

Don’t forget to download/email your statements sooner rather than later if you think you might get banned.

raekwon
raekwon

Not a bad idea, even though it reads as if they’re just banning people from referral bonus eligibility, not from having accounts.

Frank Rizzo
Frank Rizzo

Well they can just kiss my fat ass.

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