Simple is closing some customer bank accounts, and users are mad as hell

Simple, the online banking service that promised to be a better alternative to big banks like Chase or Citibank, is falling short of some users expectations. This time, it comes as a result of the sudden and surprising notice customers received alerting them that their accounts would be closed next month.

On Thursday, Simple sent notice to a small number of customers with the subject line We have to close your account on May 13. The notice went on to explain that the closures were theresult of a massive account migration the company has been working on for the last severalmonths. Those userswouldnt make the cut before Simples contract with its former partner bank ended, leaving them out in the cold.

Simple launchedits banking service in 2012, offering a forward-thinking and tech-enabled alternative to traditional brick-and-mortar banking options. With a slick web UI and mobile apps for managing customersmoney, Simple set itself apart from the monolithic banking products of the day.

In reality, the service sometimes fell short of some users expectations, due to occasional outagesand glitches that plagued userseven after it was acquiredby BBVA for $117 million three years ago.

Simplesacquisition by BBVA and its migrationto the Spanish banking groups infrastructure is the main reason behind the account closure notices issued yesterday. Until recently, Simple relied on The Bancorp Bank as itsunderlying partner bank where accounts were held.

Internally, the plan was always to move accounts over to BBVA Compass, and Simple announced the transition about a year ago. LastSeptember, Simple began sending the first of its transition letters to customers, and has been migrating accountsfrom The Bancorp to BBVA Compass ever since. Rather than try to move everyone all at once, it did so in waves so that it could handle customer service requests as they came up.

According to a Simple representative, the companysorted customersby account activity and complexity toensure the migration flow worked through a wide range of scenarios. Simplealso says it invited customers with the most complex accounts to move earlier so that itcould work through any issues that surfaced.

Unfortunately the company wasnt able to get to everyone before its deal with The Bancorp ended and it would be forced to close the remaining accounts.

Wefirst became aware of the issueafter Aaron Frank, a Simple customer and founder of YC-backed credit card startup Final, posted his noticeto Twitter yesterday. But hes not alone: Other Simple users have taken to Twitter to complain about the way the companyis handling account closures.

Frank told me that he was aware of Simples account migration to BBVAlong before hearing from the company yesterday, and even requested back in January an update on whenhe would be invited to migrate his account. In an emailed response from the company, he received the following note:

Hey Aaron,

We are sending customers emails about moving there [sic] account in batches, which is why you havent received anything just yet. But not to worry, you will be getting information on how to move your account very soon!

Let me know if you have any other questions!

Frank has sincebeen contacted by Simple customer support, but not everyone is as lucky. For its part, Simple claims that the notices were sent to less than 1 percent of its users 0.7 percent, to be exact and the vast majority of customers were migrated to the new system with no problems.

Still, with something as sensitive as banking, inconveniencingevena small number of userscan have an outsized effect on public perception. As with other previous setbacks,it takes a long time to build consumertrust when it comes to dealing with someones money and sending someone a notice that youre closing their bank account in 30 days probably doesnt help.

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