Fidelity Investments / refuses to release funds
I operate a small 501c3 non profit, and received a stock donation worth about $20,000. I opened a fidelity account so I could liquidate the stock and use the fidelity checking account service as my main checking account.
Fidelity would not allow me to open the checking account until the stock was actually transfered to my account. Once they had the stock, the transaction to cash was easy. I also mailed in a few smaller deposited from other donors, which were credited to the account. However, once they had the cash, it was impossible to use it. Here's what happened:
I filled in the forms provided by Fidelity to open the checking account, including signature cards. Two weeks later, Fidelity indicated that the wrong signature card form was submitted, even though they had provided the form. Included in the letter was a blank copy of the same form I had submitted. Fidelity now has 90% of my operating capital, and I cannot access it.
I called fidelity, and was assured by the rep that I had the right form. We went through the form line by line to ensure that it was filled out properly, and I mailed it back in. This phone call took about 40 minutes, almost all of it on hold.
10 days later, I received the exact same letter stating that the wrong form had been filled out, and providing a third copy of the same form. Once again, I called fidelity, and was assured that this was the correct form, and that I had to fill it out again. The rep insisted that the first and second copies had been filled out incorrectly, even after I pointed out that the second form had been filled out with the aid of one of their reps. Another 40-45 minutes on the phone, and I sent the same form back in. Fidelity still has 90% of my operating capital, I cannot access it, and the non-profit is falling behind on paying bills.
10 days later, I got another letter from fidelity indicating that the signature form was the wrong form for the account I was opening, and that I would have to fill out the correct form. Included in the letter was the same form I had already filled out a number of times.
Another call to Fidelity, and after hearing the same answers (that the form on the letter was the one I should use, that it must have been filled out wrong, etc), I told the rep that I had had enough, and that I wanted to close the account. At this point, Fidelity had essentially taken over $20,000 of my money for over a month, and refused to allow me to access it in any way, despite the fact that it was in a checking account that was set up specifically to allow the non-profit to pay operating expenses. Monday Morning at 9:45 AM, the Fidelity rep insisted that the account would be closed immediately, and the check cut and sent.
The following Monday I had still not received the check, so I called Fidelity yet again. After another half hour on hold, I was informed that he check was cut Friday - a full week after the account was closed, and that it would be mailed "sometime this week". So even after the account is closed, Fidelity is hanging on to my money for another two weeks.
I'm still waiting to see how long it takes to actually get the check, and to see if they actually closed the entire account.
What is interesting here is that Fidelity was more than willing to accept my signature on the checks to deposite the smaller donations, to open the account, and to sell the stock. The only time that they would not accept my signature was when I was actually trying to write a check and withdraw funds. When I finally got fed up enough to close the account, they didn't require a signature - just a phone call.
Unfortunately, there seems to be very little oversight or regulation that makes any difference. I have not been able to find any regulatory agency that will look into what is effectively theft by fidelity.
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