{"id":71753,"date":"2024-07-02T22:00:15","date_gmt":"2024-07-02T22:00:15","guid":{"rendered":"http:\/\/guid_108000481"},"modified":"2024-07-02T22:00:15","modified_gmt":"2024-07-02T22:00:15","slug":"how-thousands-of-americans-got-caught-in-fintechs-false-promise-and-lost-access-to-bank-accounts","status":"publish","type":"post","link":"https:\/\/wp.timesamerica.net\/how-thousands-of-americans-got-caught-in-fintechs-false-promise-and-lost-access-to-bank-accounts\/","title":{"rendered":"How thousands of Americans got caught in fintech\u2019s false promise and lost access to bank accounts"},"content":{"rendered":"\n
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Natasha Craft, a 25-year-old FedEx driver from Mishawaka, Indiana. She has been locked out of her Yotta banking account since May 11.<\/div>\n
Courtesy: Natasha Craft<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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When Natasha Craft first got a Yotta<\/span> banking account in 2021, she loved using it so much she told her friends to sign up.<\/p>\n

The app made saving money fun and easy, and Craft, a now 25-year-old FedEx<\/span> driver from Mishawaka, Indiana, was busy getting her financial life in order and planning a wedding. Craft had her wages deposited directly into a Yotta account and used the startup’s debit card to pay for all her expenses.<\/p>\n

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The app \u2014 which gamifies personal finance with weekly sweepstakes and other flashy features \u2014 even occasionally covered some of her transactions.<\/p>\n

“There were times I would go buy something and get that purchase for free,” Craft told CNBC.<\/p>\n

Today, her entire life savings \u2014 $7,006 \u2014 is locked up in a complicated dispute playing out in bankruptcy court, online forums like Reddit<\/span> and regulatory channels. And Yotta, an array of other startups and their banks have been caught in a moment of reckoning for the fintech industry.<\/p>\n

For customers, fintech promised the best of both worlds: The innovation, ease of use and fun of the newest apps combined with the safety of government-backed accounts held at real banks.<\/p>\n

The startups prominently displayed<\/span> protections afforded by the Federal Deposit Insurance Corp., lending credibility to their novel offerings. After all, since its 1934 inception, no depositor “has ever lost a penny of FDIC-insured deposits,” according to the agency’s website<\/span>.<\/p>\n

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But the widening fallout<\/span> over the collapse of a fintech middleman called Synapse has revealed that promise of safety as a mirage.<\/p>\n

Starting May 11, more than 100,000 Americans with $265 million<\/span> in deposits were locked out of their accounts. Roughly 85,000 of those customers were at Yotta alone, according<\/span> to the startup’s co-founder, Adam Moelis.<\/p>\n

CNBC reached out to fintech customers whose lives have been upended by the Synapse debacle.<\/p>\n

They come from all walks and stages of life, from Craft, the Indiana FedEx driver; to the owner of a chain of preschools in Oakland, California; a talent analyst for Disney<\/span>