Comments on: Zecco Charged Me $4.50 Commission and Sent Me a Margin Call

By: Jonathan

Jonathan — Fri, 19 Dec 2008 07:41:46 +0000

The wording stinks, and CSRs can be inconsistent. But there was a lot (!) of discussion when this change happened as I use Zecco too, and I’m pretty sure I have it right. Let me highlight different parts of your quote:

“For instance, your Start of Day account value reaches $2,500 on October 15th, you receive 10 free trades for the rest of October, and you’ll receive 10 free trades per month *thereafter* as long as you maintain a minimum balance of $2,500″

The first part talks about the rest of October (i.e. the current month). The second part talks about the months after (i.e. all future months).

By: Sun

Sun — Thu, 18 Dec 2008 14:51:19 +0000

Jonathan: Thanks for the clarification. However, when I read “For instance, your Start of Day account value reaches $2,500 on October 15th, you receive 10 free trades for the rest of October, and you’ll receive 10 free trades per month thereafter as long as you maintain a minimum balance of $2,500.” it doesn’t look like to me that I can get free trades for the rest of the month by only reaching the minimum just once, unless I misunderstood what “maintain a minimum balance of $2,500″ means. If that’s indeed the case, I suppose they could make it much clearer with a much simpler example, like the one you used. Besides, when I asked the CSR on the phone did confirm my theory of how it works. Of course, this isn’t the first time the people I talked to didn’t know exactly what’s going on. It happened everywhere. At different time you talk to different person, you get different stories.

By: Jonathan

Jonathan — Thu, 18 Dec 2008 06:08:14 +0000

“I can trade for free but in other days, I cannot, totally depending on the market value of my stocks on the day before I make the trade.”

To clarify, you just have to reach the $2,500 level *once* anytime during the month, and you get the 10 free trades for the rest of the month no matter how low you drop. It then resets on 1st of the next month. This is just how they avoid losing $$ on people with $100 accounts.

I agree, it is stupid that they didn’t just reject your order. Too me, I always just shrug and remember why it’s our “play” account, right? I wouldn’t keep $100,000 there.

Seems like everything worked out though? You went negative $1, and now you move in $1 and all is ok?

By: Sun

Sun — Thu, 18 Dec 2008 04:25:44 +0000

aa: As I said, it’s my own fault that I overlooked what exactly $2,500 minimum means. I don’t mind paying the commission since the rule is there for a long time and I simply ignored it. I am just not very happy with how the situation is handled. I think it’s a little bit too aggressive over six cents. But that’s Zecco, who even took back a few cents of trial deposits.

BTW, do you really think they care about my complain? This isn’t the first time I complained about their problem and I can tell you that most of my complains have fallen on deaf ears.

By: aa

aa — Thu, 18 Dec 2008 04:13:24 +0000

Many people but you can complain about this. You’re a money blogger. Plus, I’m seeing your big Zecco ad banner saying “$0 stock trades 10/month with $2,500 min. $4.50 thereafter” on the right as I’m writing this comment.

By: No Debt Plan

No Debt Plan — Thu, 18 Dec 2008 04:11:42 +0000

I can imagine about a million other ways that Zecco could have resolved this situation, none of which included threatening your positions over SIX CENTS. Wow.

By: SunFinancial (SunFinancial)

SunFinancial (SunFinancial) — Thu, 18 Dec 2008 02:28:50 +0000

Zecco Charged Me $4.50 Commission and Sent Me a Margin Call: Original Post on The Sun’s Financial Diary Zecco Ch.. http://tinyurl.com/4aukhe

By: Sun

Sun — Thu, 18 Dec 2008 02:14:23 +0000

I am aware of their 10 free trades/month with $2,500 minimum. What I am not aware of is how that $2,500 minimum is determined. And from what I read from their FAQ, it seems that whether you get 10 free trades or not depends entirely on the market value of your positions plus any cash. Not the average of the month, not the beginning of the month. Just the day before. Is that a good rule? I don’t think so. I have had my account since early 2007 and the rule was changed in 2008. The last time when I used Zecco was before September. At that time I had much more than the required minimum in my account. In the past, I didn’t have any issue with the minimum requirement either. I know it’s my own fault that I didn’t go to their website and find out exactly what $2,500 minimum means. My complain isn’t really about being charged $4.50 commission. I pay more than that with other brokers and I never complained. What I am not happy about is 1) My account is not a margin account, what’s the deal with this margin call? 2) If I don’t have enough fund in my account to cover both the trade and the commission, why they rejected the first order but chose to let the second one go through? As the CSR told me “Yeah, sometimes that could happen.”

By: Jonathan

Jonathan — Wed, 17 Dec 2008 23:32:48 +0000

Zecco does have a lot of areas to improve upon, but to be fair, the $2,500 requirement has been around for a while now and has not been changed. I’m actually surprised you didn’t know about it. “10 free trades/month with $2,500 min” is on all their banners as well.

By: Mat

Mat — Wed, 17 Dec 2008 23:13:30 +0000

There was A LOT of controversy on the Zecco forums when they made this decision. A few times the CEO/President/some-executive made a video cast explaining why it had to happen.

In October Zecco had free unlimited trades for everyone regardless of your balance. Get your balance up to $2500 of play money (is it really play money at this amount?) and Zecco’s actually not that bad. If you can get over the hurdle that there are minimums for the free trades and even trades with cost are low-cost, Zecco’s system works pretty well.

Just go ahead and try to find these benefits with another discount broker.