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November 15, 2007
How the Grinch Stole E-Trade Accounts
And the one speck of food
That he left in the house
Was a crumb that was even too small for a mouse.
-- How the Grinch Stole Christmas (1957) by Dr. Seuss
From email correspondent Aaron, on the Grinch-like behavior of E-Trade as he exited recently:
FYI, I’m a long time etrade customer and stockholder. I’ve lost quite a bit is this mismanaged banking system of theirs. I, like many customers have lost trust in the company and an moving my accounts. To rub it in, I tried to move all my savings, but they said, we can’t move partial dollars. So they rounded down my account and stole my remaining $0.17 left in my account.
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E-trade has indicated that their account holders should not be concerned about the financial safety of individual accounts, because E-trade account holders are protected by the FDICA, as well as providing 'private' insurance that E-Trade has purchased from Lloyds. E-Trade indicates that each accound is protected by a $25,000,000 Lloyds policy.
Lloyds surely provides coverage, but Lloyds will also have an 'aggregate' limit of liability within their policy, which probably would not exceed a hunderd million or so, for these accounts, far less than the billions on desposit. Anyone who might rely on such advertisement, should be wary. Lloyds has no more ability to pay 'unlimited' funds than any other insurer. Lloyds would never structure a policy of 'unlimited' exposure.