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

A US consumer watchdog saw an increase in complaints about Robinhood last week, with some customers claiming they could not liquidate stakes and move to other brokerage firms.

The Federal Trade Commission received more than 100 Robinhood-related reports between January 24 and February 2, according to the agency. The previous week brought seven such complaints. Agency data on other companies were not immediately available.

Last week was chaotic for trading platforms, as investors piled on GameStop, AMC and other high-flying stocks. Robinhood has restricted the trading of up to 50 names due to volatility and has since raised those limits.

The move has seen adverse reactions from users and lawmakers who have accused Robinhood of manipulating the market and supporting hedge fund managers who have shortened those actions. The start-up stated that it did not make these decisions based on its relationships with market makers and that it must limit the share of the purchase so that it can meet the capital requirements.

Many of the FTC’s complaints highlight these trading limits, but they also show widespread frustration with Robinhood’s customer service. Over the past year, users have complained about the lack of support when things go wrong, such as account hackers or problems with trading options.

Robinhood said it has tripled its customer support team and hired hundreds of financial representatives registered last year, as the company’s user base has exceeded 13 million. The start-up has historically said that “it can best serve customers by e-mail,” but it reaches customers by phone calls in some cases.

“We are committed to improving the support we provide to our customers. This is a major priority for us – we are actively committed and have given priority to this work,” a Robinhood spokesman told CNBC.

During the chaos of GameStop, some Robinhood customers said they could not cash their accounts to move to other trading platforms. A Robinhood user told the FTC that the ability to “continue to deposit money is still active, but the withdrawal of money or the trading of shares is completely blocked.”

“You send your complaint in vain with little hope that anyone will return to you. I just want the money earned so I can close my account and finish this service,” another Robinhood client wrote to the agency.

Another customer described a similar issue and said the only way to contact Robinhood customer support is via email. They said that “they sent numerous e-mails (almost daily) and received no response.”

Tim Maloney, co-founder of ETF Roundhill Investments, told CNBC that his transactions were restricted and he could not 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 GameStop. He told CNBC he had connection problems.

“I can’t even get into my account and I still have a few thousand dollars that I would like to transfer to my bank,” he said in a telephone interview. “I called Robinhood not to answer the phone, I sent an email to Robinhood many times and I received an email saying 1-3 business days – nothing more.”

Robinhood and other brokerage firms use a service called Automatic Client Account Transfer Service or ACATS. The system facilitates the automatic transfer from one brokerage firm to another. Brokerage firms are required by regulators to respond to any requests and initiate a transfer within 24 hours.

But this automated system does not support cryptocurrency transfers or split shares – two products that have gained momentum among younger investors. If traders own one of their portfolios, they may face liquidation problems with their Robinhood accounts, a person familiar with the process told CNBC.

Other users have complained about social media connectivity issues. Robinhood’s API provider, Plaid, which connects users’ bank accounts to applications such as Robinhood and Venmo, told CNBC that it sees 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. According to JMP Securities estimates, the company recorded 600,000 downloads on Friday alone. Robinhood venture capital investors also told CNBC that new customer discharges have far outstripped wear and tear.

Robinhood has published several blog posts explaining its decision to stop buy-side transactions. In one, Jim Swartwout, president and chief executive officer of Robinhood Securities, highlights the challenges Robinhood has had in meeting the demand.

“We grew rapidly. And sometimes we faced challenges as we expanded to meet this moment,” said Swartwout, a former TD Ameritrade executive.

“We were rightly criticized when we failed to deliver for our customers. We want our customers to be able to buy the securities they want in the quantities they want and receive the help they need when they want. We take the responsibility of our customers – and the regulations and rules that exist to protect them – seriously. “