Consumer complaint received 2025-08-22 00:00:00
Product: Checking or savings account — Checking account
Issue: Managing an account — Deposits and withdrawals
Company: CHARLES SCHWAB CORPORATION, THE
State: MA

Complaint narrative:
The core of this complaint is Schwabs bad-faith and coercive withholding of funds it admits were mishandledconditioning repayment on my agreement to a broad waiver of claims and liabilities designed to shield Schwab from accountability for its own misconduct. This tactic underscores Schwabs negligence and its refusal to engage in good-faith resolution, while instead attempting to silence me as a consumer in exchange for the return of funds that were already mine.

The currently known funds stem from five jointly payable checks ( Exhibit A ) all of which name me as a payeedeposited in XXXX into Schwab account ( s ) solely owned by the third party XXXX XXXX XXXX, XXXX, without my knowledge, endorsement, or consent. I had no visibility into those account ( s ) and only discovered the deposits in XXXX through my own investigation. I promptly reported the issue to XXXX in XX/XX/XXXX once I confirmed the deposits. 

On XX/XX/XXXX, XXXX five months, 64 message center messages, 6.5 hours of phone calls ( Exhibit B ), and a CFPB escalation ( CFPB complaint ID XXXX, filed XX/XX/XXXX ) Schwab issued a proposed Settlement Agreement and General Release ( agreement ) ( Exhibit C ) through its message center. The restitution offered was in the amount of {$4500.00}, which represents only my 50 % share of {$9000.00} in mishandled deposits, limited strictly to principaland was conditioned on my execution of a general release of liability. Schwabs acceptance of the underlying deposits violated both UCC 3-110 ( d ) and its own internal policies requiring endorsements on jointly payable instruments ( Exhibit D4 ). The return of said funds should not be conditioned on any release, waiver, or other such methods that would shield Schwab from repercussions of said violations.

The proposed agreement required me to release and forever discharge Schwab from any and all claims whether now known or unknown, and expressly stated that Client waives any rights she may have under California Civil Code 1542. It also bars reimbursement for costs, fees, or time I have already incurred as a direct result of Schwabs mishandling. In short, Schwab conditioned repayment of funds it already admits were mishandled ( Exhibit D3 ) on my permanent silence and forfeiture of both existing and future claims. That is not resolution ; it is coercive withholding through a blanket release of rights. 

On XX/XX/XXXX, I formally rejected Schwabs proposed agreement through the message center ( Exhibit D2 ). My rejection letter explained the agreement was inadequate because it failed to : Pay interest on the withheld funds ; Compensate me for time and costs, incurred and ongoing, resulting from Schwabs negligence ; Provide transparency into other potentially mishandled transactions ; Include the fraud teams findings for Case No. XXXX, initiated XX/XX/XXXX, which I requested multiple times and which Schwab unilaterally marked closed without providing the report or allowing me to speak to anyone from the fraud team who investigated my case. 

On XX/XX/XXXX, I received a UPS package containing Schwabs XX/XX/XXXX letter ( Exhibit E ). That letter : Restated my complaint without addressing these issues ; Simply referenced the rejected settlement, describing it as reasonable ; Explicitly refused to provide further informationa clear admission of noncooperation regarding financial records to which I am entitled as a named payee ( on XX/XX/XXXX, Schwab stated Apart from the check copies, Schwab can not provide additional documents without a subpoena or other legal process [ Exhibit D3 ] ) ; Contained no revised proposal. 

On XX/XX/XXXX, Schwab doubled down in a message center communication acknowledging my rejection ( Exhibit D1 ). In that message, Schwab stated that it will not be making any modifications to the existing settlement agreement and that the terms presented represent its final position on this issue. Schwab further advised that unless I signed the agreement by its expiration date of XX/XX/XXXX, no further settlement discussions will be pursued. This makes clear Schwab is refusing to return even the {$4500.00} principalmy 50 % share of the mishandled $ XXXX I first accept its improper agreement and underlying terms. 

Ultimately, Schwabs XX/XX/XXXX and XX/XX/XXXX communications, which together appear to form the basis for its closure of my CFPB complaint ( ID XXXX ), did not addresslet alone resolveany of the issues I raised. Rather than engaging with my specific concerns, Schwab merely recited my initial complaint, referenced the rejected settlement, and declared the matter closed, refusing to provide further information, remediation, or the return of the principal they admitted is owed. This is not resolutionit is evasion.

Unfair, Deceptive, and Coercive Practices Schwabs actions are not merely poor service; they align with practices the CFPB has defined as unfair and deceptive : Coercive Withholding : Conditioning the return of my own fundswhich Schwab has already admitted were mishandledon execution of a release and forever discharge of Schwab from any and all claims whether known or unknown is inherently coercive. The return of principal is not consideration for a settlement ; it is the bare minimum remediation for violations of UCC 3-110 ( d ) and Schwabs own stated policies requiring endorsements on jointly payable instruments.

Lack of Transparency : Schwab unilaterally closed the fraud case I initiated while refusing to provide its findings, denying me the ability to understand the full scope of the harm. This undermines both consumer protection principles and my rights as a named payee. 

Obstructive Conduct : The timing of their XX/XX/XXXX closure letter, dated just before the CFPBs 60-day deadline ( i.e. 60 days from XX/XX/XXXX, when my complaint was submitted ), appears designed to evade meaningful regulatory oversight rather than resolve the issue. 

Final Position Stonewalling : Schwabs XX/XX/XXXX communication confirmed it will not be making any modifications to the settlement agreement and declared its terms final. This entrenched refusal to engage in meaningful resolution illustrates bad faith and underscores the imbalance of power between a consumer and a major financial institution. 

Without regulatory intervention, Schwab has signaled it will continue stonewalling. I respectfully request that the CFPB direct Schwab to provide full cooperation and take enforcement action as necessary to ensure compliance and protect consumers.

Unequal Bargaining Power : It is not reasonable to expect an individual consumer to face an institution of Schwabs size and resources alone. Schwabs conduct has forced me to contemplate costly legal representation just to obtain basic restitution and records. This dynamic magnifies the harm, as the expense of pursuing relief can exceed the very funds at stake, leaving consumers without meaningful recourse absent regulatory intervention.

Consumer Harm Beyond This Case : Practices like these not only deprive individual consumers of rightful funds but also risk silencing victims of financial abuse and exploitation more broadly, leaving them without meaningful recourse.

Schwabs conduct demonstrates a refusal to resolve this matter in good faith. Conditioning repayment of mishandled funds on a sweeping release of rights is coercive and contrary to consumer protection principles.

Company response to consumer: Closed with explanation