Robinhood is offering users compensation after major outages - Business Insider

by a similar glitch just a week later. Both outages were caused by increased trading volumes that overwhelmed the platform, amid a volatile period for the stock market triggered by the coronavirus pandemic.

Offering compensation can help Robinhood avoid a legal battle and make amends with customers — but it might not be enough in all cases. Compensation can boost satisfaction with Robinhood, but there's a catch for users who opt to accept it. Reimbursing users for at least some of their losses during the outage could be enough to placate some. However, to receive the compensation, users have to sign an agreement that they will not bring legal action against Robinhood.

But the compensation offered might not be enough in all cases. At least one federal lawsuit was already filed on behalf of some Robinhood traders, and an injunction has now been filed asking to forbid the fintech from sending "further misleading communications" — like the ones about receiving compensation — to clients, and calling for all signed compensation agreements to be made void.

Regardless of whether this move succeeds in mending some customer relationships, the real focus for Robinhood should be avoiding outages in the future. Missing out on making trades due to platform issues has likely reduced some customers' trust in Robinhood. That exacerbates the platform's already difficult task of acquiring and retaining customers: Competition is heightening in the online trading space, with many legacy players fees to remain competitive with startups like Robinhood.

South Africa South Africa Latest News, South Africa South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Federal relief loan chaos on Twitter: banks turn small businesses away - Business Insider'We don't get lifeboats': Entrepreneurs are raging on Twitter after banks turn away desperate business owners who were promised government relief today lifeboats are on order....GM is maybe going to start making lifeboats. There is no life raft when we are all drowning simultaneously. S O S !!!!!
Source: BusinessInsider - 🏆 729. / 51 Read more »

Wall Street's new disaster playbook; top restructuring lawyers - Business InsiderWall Street Insider is a behind-the-scenes look at the stories dominating banking, business, and big deals.
Source: BusinessInsider - 🏆 729. / 51 Read more »

Hobby Lobby stores still open in some 14 states amid coronavirus - Business InsiderState officials shuttered reopened Hobby Lobby stores in Colorado and Ohio, but employees in at least 14 states are still being forced to work in defiance of coronavirus-related lockdown orders JFC Michael's and Joann Fabrics are doing the same thing. Please check them out. Michael's has given the option to their employee's to either work or quit their jobs. Ruthless!
Source: BusinessInsider - 🏆 729. / 51 Read more »

The coronavirus infected the first resident at a San Francisco shelter - Business InsiderThe person is in self-isolation and in good condition as officials work to contain the spread of the virus among the city's homeless residents.
Source: BusinessInsider - 🏆 729. / 51 Read more »

How Iceland is approaching the coronavirus pandemic - Business InsiderIceland is allowing everyone in the country to be tested for the coronavirus. The government says it spent years perfecting its approach.
Source: BusinessInsider - 🏆 729. / 51 Read more »