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May 2010

This is a brief review of my experiences with the discount brokerage Scottrade. If you are interested, you can open an account at Scottrade here.

I first opened my account with Scottrade a little over five years ago. At the time, my current discount brokerage, Wachovia, began charging an inactivity fee. They claimed I was warned in advance through a notice accompanying my statement, and I could not get the first inactivity fee waived. Disappointed with the unnecessary fee considering the broker already made money from the loaded funds I purchased as a novice investor, I decided to to move my funds to a brokerage recommended by people I trusted.

Scottrade hasn’t let me down yet. My investments at Scottrade and formerly at Wachovia consist of a relatively small amount of funds remaining from gifts given to me as a child, held in a UTMA account until I was out of college. Some of these funds went to pay off the credit cards balances I built up while I wasn’t earning enough money to meet my basic expenses, but the rest has been sitting in this account, invested in AIVSX.

After opening my account with Scottrade, I received a few telephone calls from a customer service representative who wanted to discuss my account. One of Scottrade’s advantages over other discount brokerages is their physical locations. You can visit a Scottrade location and sit down with a broker to discuss your finances.

If you do plan to speak with a broker, listen to our interview with Richard Lewins, the author of How to Keep From Going Broke with a Broker — A Guide to Opening, Maintaining and Surviving Your Brokerage Account before you do in order to go into the discussion with the proper expectations.

Since I do not actively trade with my Scottrade account, I can only share a small amount of details. I receive online statements and I can view my activity, consisting exclusively of dividends reinvested in AIVSX. I have never had a problem with Scottrade and will continue to leave these funds there until they decide to implement an inactivity fee or an account maintenance fee.

I already wasted enough money paying a load fee on each investment as well as a $50 inactivity fee and a $75 termination fee to Wachovia, and I don’t wish to do the same with Scottrade. I have no reason to believe these fees are in this brokerage’s immediate future.

What are your experiences with Scottrade? Leave your thoughts in the comments below.

Apply for a Scottrade account


It’s been a hectic weekend so far. I’ve spent many hours on the road between my home in New Jersey, Pennsylvania, and Queens. Friends of mine will be married to each other in a few weeks, and they wanted to have some wedding photographs shot including their pet guinea pigs. They were concerned about dealing with these pets on the day of the wedding, so I volunteered to put my photography skills to the test for a small assignment.

We took sets of photographs outside their house in Pennsylvania, with the bride and groom in full dress and tuxedo holding their guinea pigs. For the sake of their privacy, I won’t include a photo of my friends, but I will share a photograph of one of their three guinea pigs.

My day job requires me to work for a few minutes on Monday morning, and after leaving Pennsylvania to go to Queens on Saturday, I realized I did not have the materials I needed. Sunday afternoon I trekked back to my home, stopping at my office to pick up a necessary slip of paper. Later that evening, I drove back to New York to be in town for Monday’s Memorial Day parade, a family tradition for my girlfriend.

While enjoying your holiday, take a look at these articles. [click to continue…]


Today’s guest on the Consumerism Commentary Podcast is Richard Lewins, founder of the LewinsLaw legal practice and author of the book, How to Keep From Going Broke with a Broker – A Guide to Opening, Maintaining and Surviving Your Brokerage Account. Tom Dziubek talks to Richard about the basics of what being a broker is, what their responsibilities are, and how to take precautions when dealing with one.

Consumerism Commentary Podcast #58
How to Keep From Going Broke With a Broker, Richard Lewins
Production/Segment: S03E06 / 77

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Table of contents

[00:00] Introduction from Flexo
[00:32] Interview with Richard Lewins
[00:48] LewinsLaw legal practice
[01:09] Defining brokers
[01:53] Broker training and licenses
[04:15] Brokers and fiduciaries
[05:27] How brokers are compensated
[06:06] The guidance that people can expect from brokers
[07:09] The people who need brokers
[08:50] Brokers and discount brokerages
[09:48] How to deal with possible broker misconduct
[12:41] Examples of broker misconduct
[16:28] How to Keep From Going Broke with a Broker
[18:54] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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You probably know that your debit and credit cards have someone watching over them for indications of fraud and/or theft, and we’ve written here before about making sure you tell the bank in advance of a trip so that they don’t mistakenly block your card. I’ve personally seen this system work well, and also not so well. But until this week, I never heard some of the intricacies of how fraud detection works.

MetaFilter is a group weblog which has gained a reputation over more than ten years for being consistently interesting, thoughtful, concise and free of junk. They maintain this partially through a nominal registration fee, which keeps out the riff-raff amazingly well. A sub-site called Ask MetaFilter exists primarily for members to seek advice and knowledge from each other. Someone on “Ask MeFi” recently asked:

Banking Deal: Earn 1.30% APY on an FDIC-insured savings account at Synchrony Bank.

Just got a call from my bank, Chase, for credit card fraud. Got it all taken care of, card canceled, new one on the way…no worries. I’m just wondering, what tipped them off?

Among the several answers was a lengthy comment from someone who used to work in fraud detection (could this person be making it all up? I suppose, but why would they?). Here are some interesting passages, which piece together the whole process:

  • We used software […] that basically tied a bunch of different databases together
  • We started in a queue and looked at risk factors, such as:
    • Testing charges. These are usually online charges through known online vendors that a scammer can use to test a card number as valid. So [if we see] Amazon MP3 followed by Newegg … [you’re] probably going to get called
    • Gas is something you can buy almost anywhere without being on camera or talking face-to-face with a clerk. A crook will steal a card, test it at a pump, and then go on a spending spree. So gas followed by Best Buy…. [you’re] probably going to get called
    • Out of Country charges. This is an indication that a card has been compromised by a foreign entity (Russia and Turky were two concerns at the time) and fake plastic has been made and is being used until it’s found. Cards leave a data trail of where they’re used, so [if yours is] almost always used in X suddenly used miles away in Y… [you’re] probably going to get called
    • Let’s say that a person always uses their card for fast food, gas, and sometimes clothes shopping. All of a sudden we have $2,000 dollars coming through from electronics. Probably going to get called.
    • If something starts off as low risk, but keeps coming back again and again it’s going to get moved up in the queues until someone finally looks at it.

The former fraud detection worker summarizes it this way:

When you use that card, you’re being watched. Sometimes by a person, but most often by computers that analyze and store every purchase you make. Even if you don’t know it, you have a data trail, and that data trail has a signature to it. When something breaks that signature, and is surrounded by other suspicious details, it either get automatically handled by a computer, and will eventually be handled by a human. The testing charge was suspicious, but maybe by itself wouldn’t have mattered. Followed by tools (easy to fence, so a pretty common flag charge) it’s no question. Especially if it looked at your account and couldn’t find strong previous history with either. So your account gets sent to a high priority queue, and some underpaid dude on the eastern seaboard looks at it, tags it as fraud, and calls you to confirm, maybe helping him make an extra 200 bones at the end of the month.


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