Class Action Claims Beam Financial Users Duped on Interest Earnings, Access to Account Funds

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A proposed class action alleges users of Beam Financial’s banking app have been duped by the fintech company, which promised that their money would be accessible “24/7” and that they could earn interest rates on savings accounts many times higher than the average annual percentage yield. 

After opening accounts with Beam and trusting the company with their money, Beam customers have not been paid interest and have been prevented from accessing or withdrawing their deposited money, the 26-page lawsuit claims. According to the complaint, Beam app users have lost large sums of money in unpaid interest and “thousands of dollars that were theirs,” as well as the ability to freely use their own money. 

The plaintiff, a Naples, Florida Beam app user, says he has, to no avail, repeatedly requested information about the status of his withdrawal. In response, Beam has allegedly conceded its mistake yet has gone no further as far as assuring users when they might receive their money.

“Beam has admitted fault but offers no assurances that Plaintiff or class members will receive their money any time soon—writing there is ‘no timeline’ for when we will return your money,” the suit says, asserting that Beam has “breached its duties” to users, violated California laws and engaged in false advertising. 

As the lawsuit tells it, Beam’s goal was to be the first high-interest bank account geared toward millennials. Amid the ever-evolving fintech space, Beam has sought to “disrupt the financial industry” by using innovation and technology to go toe to toe with traditional financial entities, the suit describes. 

Among the promises made to customers, Beam claims their accounts will accrue daily interest and be free from “lockup” and transfer restrictions, the case says. Additionally, Beam claims funds will arrive in three to five business days, and that customers will have “24/7 access” to their money and “peace of mind,” according to the lawsuit. Per the suit, Beam boasts nearly 187,000 subscribers, who were promised by the defendant that they would not have to “lock [their] money away and be exposed to investment loss risk.”

Further, Beam has assured customers that their deposited funds are “always FDIC-insured by member banks to the full amount,” the lawsuit relays. 

According to the complaint, however, Beam has taken advantage of the trust of its customers by misrepresenting “the nature and quality” of its banking services. In March 2020, the defendant began to have trouble processing customer withdrawals, and many who submitted withdrawal requests through the company’s app have to date not received those funds, the lawsuit claims. 

The suit charges that despite releasing a statement in which a Beam spokeswoman relayed it’s difficult to ‘give an exact date when customers will receive their funds,” the defendant, in order to “conceal its misconduct,” has continually shifted the blame to “a series of ever-changing external causes” for its issues in processing withdrawals.

According to the lawsuit, Beam first blamed withdrawal processing delays on the coronavirus pandemic, telling customers the issues stemmed from “higher transaction volumes” than the company’s banking partners could handle. Then, in October, Beam acknowledged in a statement to accountholders that withdrawal processing problems had persisted for “the past few months,” the suit says. Per the case, this statement served to further conceal Beam’s conduct in that the company blamed the delays on its network of intermediaries and an ACH vendor. 

In a November statement, Beam again attempted to conceal its part in the processing delays by again blaming vendors, in particular ACH processor Dwolla and Huntington National Bank, the suit continues. Dwolla, however, has disputed Beam’s characterization of its role in the delays, telling CNBC that it decided to end its service agreement with the defendant due in part to suspicions that “activity on the Beam application might harm consumers,” the lawsuit reads. Dwolla further stated that its suspension of services to Beam does not stand in the way of the company returning funds to customers through other methods, the suit adds. 

In addition to Dwolla, other vendors have also severed their relationships with Beam, the case says. Thus far, Dwolla, Huntington National Bank and R&T, a vendor responsible for transferring deposits made on the Beam app to a network of FDIC-insured banks, have filed a lawsuit against the defendant, alleging the statements made to customers with regard to their roles in the processing delays are inaccurate. From the complaint:

“Dwolla, Huntington National Bank, and Stable Custody Group’s lawsuit also alleges that ‘[a]ny delays in customers receiving their funds was solely due to Beam’s delays.’ In addition, the lawsuit reveals that Beam’s claim that the company is ‘working 24/7’ to solve the problems is false, as Beam has yet to provide any instructions to the vendors for the return of customers’ funds. Critically, the suit alleges that only Beam has the information about its customers [sic] identities and their deposits that would be necessary to return the millions of dollars in customer deposits.” 

Citing a CNBC report, the lawsuit says the Federal Trade Commission (FTC) has clocked at least 68 complaints from Beam customers, with the Better Business Bureau and Apple App Store also receiving “a litany of complaints” with regard to the defendant’s alleged conduct. 

“Instead of providing what [sic] advertised, Beam took advantage of these individuals for its own profit and personal gain,” the case alleges. 

The lawsuit looks to represent anyone who established a Beam account and deposited money therein at any time from September 1, 2019 through the present. 

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