The FTC sees an increase in Robinhood’s complaints, as customers say they can’t leave the app

A U.S. consumer watchdog saw an increase in complaints about Robinhood last week, with some customers claiming they were unable to liquidate their holdings and switch to other brokers.

The Federal Trade Commission received more than 100 Robinhood-related reports from January 24 to February 2, according to the agency. The previous week brought seven complaints. The agency’s data on other companies was not immediately available.

The past week has been chaotic for trading platforms, with investors investing in GameStop, AMC and other stocks on the rise. Robinhood restricted the trading of up to 50 names due to volatility, and has since raised those limits.

The move sparked a backlash from users and lawmakers who accused Robinhood of market manipulation and supported hedge fund managers who sold those shares. The start-up said it does not make these decisions based on the relationship with market makers and needs to limit the purchase side so that it can meet capital needs.

Many of the FTC’s complaints highlight these trading limits, but also show widespread frustration with Robinhood’s customer service. Last year, users complained about a lack of support when things went wrong, like hacking accounts or problems with trading options.

Robinhood said it has tripled its customer support team and hired hundreds of registered financial representatives last year, when the company’s user base surpassed 13 million. The start-up said historically, “it can serve customers better by email”, but it reaches customers by phone in certain cases.

“We are committed to improving the support we offer to customers. This is one of our top priorities – we are actively hiring and prioritizing this work,” a Robinhood spokesman told CNBC.

During the GameStop chaos, some Robinhood customers said they were unable to withdraw their accounts to switch to other trading platforms. A Robinhood user told the FTC that the ability to “continue depositing money is still active, but withdrawing money or trading in shares is completely blocked”.

“You send your complaint to the void with little hope that someone will return your contact. I just want the money I earned to be able to close my account and end this service,” wrote another Robinhood client to the agency.

Another customer described a similar problem and said that the only way to contact Robinhood customer support is by email. They said they “sent several emails (almost daily) and got no response.”

Tim Maloney, co-founder of ETF company Roundhill Investments, told CNBC that his business was restricted and he was unable to withdraw money from Robinhood. Maloney was also unable to contact Robinhood customer support.

Rayz Rayl, a former teacher and now a professional poker player, said he lost thousands of dollars last week trading in GameStop. He told CNBC that he is having trouble logging in.

“I can’t even log into my account and I still have maybe a few thousand dollars that I would like to transfer to my bank,” he said in a telephone interview. “I called Robinhood, they don’t answer the phone, I sent Robinhood a lot of emails and I get an email saying 1-3 business days – still nothing.”

Robinhood and other brokers use a service called the Customer Account Automated Transfer Service, or ACATS. The system facilitates the transfer from one broker to another, automatically. Brokers are required by regulators to respond to all requests and initiate the transfer within 24 hours.

But this automated system doesn’t support cryptocurrency transfers or fractional shares – two products that have taken off among younger investors. If dealers keep anyone in their wallet, they may be having trouble settling their accounts at Robinhood, a person familiar with the process told CNBC.

Other users have complained about connectivity problems on social networks. Robinhood’s API provider, Plaid, which connects users’ bank accounts to applications like Robinhood and Venmo, told CNBC he was seeing no problems or downtime at the end.

Despite the complaints, some reports show that hundreds of thousands of people signed up for Robinhood last week. By JMP Securities’ estimate, the company saw 600,000 downloads on Friday alone. Robinhood’s venture capitalists also told CNBC that new customer downloads far outweigh the wear and tear.

Robinhood published several blog posts explaining his decision to end the purchase negotiations. In one of them, Jim Swartwout is President and COO of Robinhood Securities, describes the challenges that Robinhood faced to meet the demand.

“We grew quickly. And sometimes we encounter challenges as we adapt to meet this moment,” said Swartwout, a former executive at TD Ameritrade.

“We have been rightly criticized when we fail to serve our customers. We want our customers to be able to buy the titles they want in the quantities they want and get the help they need when they want. We take our responsibility to our customers – and the regulations and rules that exist to protect them – seriously. “