Secret promotion at Zecco, sign of bad times?

Zecco LogoFirst rumored and then confirmed, this new promotion is in fact ongoing at Zecco. If you open a trading account before May 1, 2007 your minimum required balance will be $1000 instead of the usual $2500 currently displayed on Zecco website.

Here is the email that Golbguru of Money, Matter, and More Musings received from Zecco customer service after he lingered with funding his new account:

Thank you for opening an account with Zecco Trading. This is just a friendly reminder that you have not funded your account and we wouldn’t want you to miss the opportunity to take advantage of our extraordinary offer. For the next 2 weeks, we’ve lowered the minimum to open an account from $2,500 to $1,000.

Zecco is an online trading portal that launched in September 2006 and vowed to disrupt the US brokerage industry by offering free trades. So far they stick to their word and the trades are really free. In fact they recently added another product to the family: zero commission IRA trades.

The trades do cost Zecco money. While the fee at wholesale rate is not nearly as high as we pay (it turns out around $2), Zecco still has to recoup the expense via other revenue sources. What sources? Advertisement seems to be the main revenue stream that comes to my head. This is why the team is so eager to build an active community around the website. To get things started they even offer revenue sharing for guest bloggers.

So what happened? The Alexa chart below pretty much shows it. The idea hasn’t really picked up. After the initial splash during the launch the interest leveled out.

Zecco Alexa Chart

I just called Zecco and spoke to a customer service representative. Apparently this new promotion is something they don’t openly advertise except in the emails they send to current account holders. The reason? I am not really sure.

While I do like the new Web2.0-ish business model that Zecco pioneered for online trading, I seem to get extremely conservative when the matter comes to trusting someone with thousands of dollars, my dollars. The feeling of a well established business with a proven record is what’s clearly missing with Zecco. Might it be that I am not alone with my doubts and this promotion is a sign that things are not going that well for Zecco?

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7 Responses to “Secret promotion at Zecco, sign of bad times?”

  1. 1 Sun Apr 18th, 2007 at 8:22 am

    Thanks for the mention, Yan! I am not confident about their business either. In my opinion commission free trading should attract lots of investors, but this low account minimum promotion doesn’t seem to support the assumption. Beside, when I can called for details about the promotion, I wasn’t really impressed by their customer service. First I was put on hold for quite some time, then during the conversation, the CSR had to check back a couple of times to get an idea what their promotion really is.

  2. 2 Anon Apr 24th, 2007 at 4:37 pm

    I’ve had a really difficult time getting someone on the phone. First of all, none of their phone tree options applies to me — all have to deal with issues other than my questions regarding a new account. Then, when I pick something that somewhat applies, I am routed to a recording that asks that I leave a message and a Zecco rep will call me back. Sorry, won’t wait for a callback. My emails to don’t get answered for about 2 days.

    Customer service at Zecco has been very poor, imo. I’m questioning whether or not I should even deposit my money at this point…

  3. 3 Andrew Kasper May 2nd, 2007 at 2:44 pm

    The complaints about Zecco’s customer service are rather unsurprising. You get what you pay for, people!

    I have a feeling that Zecco is not currently sustainable. They intend to make their money off of advertisement and margin; without visitors to the site, that just doesn’t seem likely. They need regular users.

    I do trust the company itself, though. I don’t think they’re going to steal our money,. They are a subsidiary of Equinox Securities, which is an SIPC member. The worst that could happen? Zecco would go under and we’d have to transfer our cash/ stocks to another account.

    All that said, the website does look a bit fishy. There are some serious usability concerns (I’m a self-proclaimed usability expert), and the site definitely needs to be cleaned up.

    Hopefully, Zecco will succeed and we’ll have commission-free trades for the rest of our lives.

  4. 4 Yan Jun 6th, 2007 at 7:27 pm

    Just got an email from Zecco. It is official, they lowered minimum balance to open an account to $0.

  5. 5 Ritch Jun 27th, 2007 at 1:25 pm

    Zecco have a very poor customer service.
    They have lost my paperwork and it was impossible to solve the problem until sending again all the papers. The customer team is not able to follow a simple problem and to solve it. Very very poor service. Hope that nobody will have problems, because it takes days to solve them.

  6. 6 Lori Oct 8th, 2009 at 12:08 pm

    I would STRONGLY recommend researching thiscompany before doing business with them. I actually filed a complaint with the FTC. Also, go to—-this is NOT a Charles Schwab—it has three employees.

    Issue One: With Zecco you risk arbitrary stock liquidation. This caveat is buried in the bottom of their emails.
    Zecco Trading reserves the right to liquidate stock or option positions at any time if it deems that sufficient risk exists to the firm. In the event Zecco Trading takes action to mitigate risks by closing out positions, the client is not absolved of his/her financial obligations to meet additional margin calls or unsecured debit balances. Any market losses due to forced liquidations are the sole responsibility of the account holder(s).

    Issue Two—Price Gouging: 4.50 a trade? Expect more fees. This is from another email they sent to me.
    “Dear Client, Please be advised that recent activity or market value adjustments has generated a Required Maintenance (RM) margin call in your Zecco Trading account. NOTE: If you have a cash account and are receiving this Required Maintenance Margin Call, please know that your actual call type is a Money Due call and you may have a different due date. Please contact us immediately for details or visit the Margin Call Summary Page under Account Records once in the Trading Center of the Zecco Trading website.”

    They also will charge fees (again with no warning on their site) if they have problems accessing the bank account used to set up the stock account, even though they admitted this is a common problem with credit unions, &an issue between institutions, and an issue that the consumer has no control over. (Secondly, my t micro deposits went in my account successfully, and then Zecco even withdrew a micro-deposit from my account successfully, yet they then claimed they could not access my bank account and I owed them 30$.)

    If this is a common problem, and they are going to charge the 30$ feethey need to have a written warning on their web site, and they do not.

    P.S. I called Charles Schwab and E-Trade to ask if they charged a fee if the ACH transfer didn’t go trhough, and they said definitely not. This is NOT common practice.

    In closing, their customer service reminded me of talking to someone on the Sopranoes—talking down, whining saying they have to get money from somehwerre, etc. Probably one of the most unprofessional companies I have dealt with ever.

  7. 7 yaakov May 24th, 2011 at 9:20 pm

    the worst broker i found. mafia style behavior. money missing from my account. left them 2 months after openning the account. be carefull and find a reliable broker.

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