SLAMMED BY E*TRADE
Opened my E*Trade account over two years ago, lured in by a $50 cash incentive. I had transferred 20,000 shares of a stock worth about 30 cents a share. The plan was to save on commissions, compared to my traditional discount broker, which charged higher fees for trading such large volume/low cost stocks, and channel trade that stock, as the price went through its usual saw-tooth pattern.
Well, we all know what the market conditions have been, and that stock just kept declining in value, so I held on for the long term, and became an inactive trader.
Then they began charging newly-instituted fees. Because the value of the stock had fallen below the threshold, I was subject to the Account Maintenance Fee: First $15 a quarter, and then $25. Now theyve added an additional $3 a trade surcharge, unless you do a huge number of trades per quarter. The advertised $9.95 trade has been increased to $19.95, er, $22.95. Oh, and if you trade a large number of shares, its now a penny-per-share over the first 5000. All the reasons for opening this account in the first place have been taken away. Their new structure invites you to trade recklessly, and discourages the prudent, long-term investor. Core account interest rate is 0.2% (vs 1.12 for my regular account). Margin interest rates are also better in the other account.
My biggest gripe is the TERMINATION FEE. It is not in the Customer Agreement, nor is it made known to the customer. You only find out about it when you close the account, and SIXTY DOLLARS is deducted from your core account. In my case, the fee was more than the amount left in the core account, resulting in CASH BEING WITHDRAWN from my regular brokerage account, almost causing an overdraft, since Im nearly fully invested.
E*Trade runs their business as a classic Bait and Switch Scam.
Did someone mention CLASS-ACTION LAWSUIT?
Canton, New York