E-Trade account restrictions

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CEdwards's picture
CEdwards
Status: Member (Offline)
Joined: May 2 2008
Posts: 5
E-Trade account restrictions

E-Trade has put a "security" restriction on my brokerage accounts and I am no longer able to access my funds.  No explanation has been given for the restriction.  It's curious that the restriction happened right after a successful transfer of funds OUT last week.

After 8 security questions had been answered correctly, I am told that I still need to have a "letter of instructions" notarized and mailed to E-Trade saying I-am-who-I-am before I can access my cash.  They WILL allow me to make stock trades over the phone, but no other access is allowed.

 Anyone else in a similar situation?

 

Pandabonium's picture
Pandabonium
Status: Bronze Member (Offline)
Joined: Aug 30 2008
Posts: 88
Re: E-Trade account restrictions

I don't have this problem, but I have heard of it happening to others at various times.   If you have made online trades or transfers from more than one IP address (ie from home and from work) this would cause a red flag for security and they might put your account on hold until they verify your identity.  You need to speak directly with their secutiry department 1-800-293-1621.

Hope you get this resolved quickly.

bearing01's picture
bearing01
Status: Silver Member (Offline)
Joined: Sep 7 2008
Posts: 153
Re: E-Trade account restrictions

2 weeks ago I sold some stocks and went to buy more shares with the account credit.  It gave me a warning that they would freeze my account for 60 days and report me to the SEC.  I don't know the details/reason for this.  Needless to say, I didn't continue with my transaction.

CEdwards's picture
CEdwards
Status: Member (Offline)
Joined: May 2 2008
Posts: 5
Re: E-Trade account restrictions

Thanks Pandabonium (great name!),

 That's a good possibility since I'm on vacation and away from home.

What had me excited (pissed) was the lack of explanation for the security hold, the fact that I could still verbally execute stock trades, the wire transfer was successful without any complaints from me and I had full access to my account for the three days following the transaction.

I'll try contacting them again tomorrow morning and hope they have an explanation then.

Bearing01 - It would be nice to know exactly what the problem was with your sell\buy transactions.  Being told you may be reported to the SEC would get my full attention.

 -Flame off for now

 

 

 

Pandabonium's picture
Pandabonium
Status: Bronze Member (Offline)
Joined: Aug 30 2008
Posts: 88
Re: E-Trade account restrictions

You're welcome Flameon2k.

 Bearing01 - I don't trade stocks anymore, but a few years back when I was, the same thing happened to me.  Here's the deal: When you sell a stock, it takes time to clear and if you try to buy something else with the proceeds right away, you are essentially trying to buy stock without funds.  It is confusing because the amount you are getting on the sale shows up on the screen, but you don't really have those funds available.  It is an SEC regulation they are dealing with, so they are required to issue the warning and enforce a suspension if you do it again.  

So, in the future you can either wait a few days until the transaction is settled or make sure you have enough cash in the account to cover the stock you want to buy. 

Hope that helps.  

CEdwards's picture
CEdwards
Status: Member (Offline)
Joined: May 2 2008
Posts: 5
Re: E-Trade account restrictions

FYI updates - further conversations with E-Trade

OK, I spoke with E-Trade, they will not discuss why my account has been restricted until they receive a notarized letter of instructions from me.  I can still verbally make stock transactions but I cannot to access my cash deposits until they receive my letter, verify it's authenticity and then speak with me about it (probably to tell me how strong E-Trade financial is and that I should keep my cash with them).  I asked about the breakdown in logic regarding this "half access" crap and received a "It's standard E-Trade policy" reply.

I asked if I can walk into an E-Trade branch on Monday to prove that I'm me and they said, "No, you only have two to three business day to do that, you have to mail in the letter".  No logic here either, but my flame may be obscuring it...

 

 

 

 

Pandabonium's picture
Pandabonium
Status: Bronze Member (Offline)
Joined: Aug 30 2008
Posts: 88
Re: E-Trade account restrictions

Sorry to hear that.  It has been a few years since I traded stocks, but I never had that kind of response from Scottrade.  When I did encounter something I could not resolve with their Q&A section, I could call the broker and always get things explained and resolved quickly. 

 I never have a problem with policies designed to protect me, but an explanation better come with it.  To not offer reasons why is unacceptable in my book.  

 Best.

 

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