My recent experience with Zecco Trading, a "zero commission online brokerage firm," has prompted me to close my Zecco account after transferring out everything in-kind. Zecco is yet another example of a startup that provides an unreliable product along with terrible customer services. Since Zecco deals with customers' money, such gross sloppiness is absolutely unacceptable.

I signed up with Zecco shortly after it's debut on CNBC. I was unimpressed with the website's features, but those free trades were certainly appealing. In addition, having been involved with
a few startups, I wanted to give Zecco more time to develop. I even referred a couple friends who later signed up with it. Probably because I was one of the first customers it got, I was invited to sit on its customer advisory board, which consisted of I think about 12 people. The company held two conference calls with us, where we raised a lot of issues and feature requests. It suffices to say that none of my requests have been worked out, after more than a year. The Zecco app has a 10 minute session timeout. I wanted it to be longer, or more user configurable. Zecco said it was too hard to synchronize the timeout with its backend trading system from Penson. Another issue is that the investment records for downloads don't include dividend payouts. By the way, the customer advisory board went dormant after the first two calls.

Although I didn't give Zecco up for such "inconveniences," over time I grew quite irritated by the site's unreliability. Sometimes I wouldn't be able to login. Another time I couldn't sell a holding called NYX, and it turned out the recent NYSE/Euronext merger confused Zecco's system. By the time a customer rep from Zecco called me a few days later, NYX had already dropped a few points, and I changed my mind. Recently, another holding of mine was acquired, and Zecco's system showed a zero cost basis for the new ticker symbol (PWE). I had to call them to have my cost basis updated. The issues list goes on...

And what really put me off tilt, to borrow a term from poker players, was Zecco's star customer service team. Zecco doesn't provide a secure messaging system for customers to email them with, instead one has to email, in plain text, a generic customer service address.

Anyway, to make the long story short, I closed my Zecco IRA account in Nov. 2007, when Zecco unexpectedly charged me a total of $70 (so much for zero commission...). Recently I was thinking about closing my regular account as well, but I decided to first find out how much it would cost me to close it. I emailed Zecco my questions. I got a reply from a rep saying I was over charged by $20, and that a fee reversal request was put in for me. I thought, OK, at least they were honest. The next day I received another message saying that they put in a request to close my regular account. I was very confused, as I never asked to have it closed. Besides, there are positions in the account. What is Zecco gonna do about them? I certainly don't want them liquidated. I emailed back, in no uncertain terms, asking them not to close my account. One day later, I received an email apologizing for the confusion, and saying my account would not be closed. The same evening, I lost access to my trading account... I'm now trying to transfer out of Zecco just as quickly as I possibly can.

Morale of this true story. First, you get what you pay for. Second, most startups are unfortunately very sloppy and provide terrible products and/or services. Third, you should avoid a startup, in terms of seeking a job or doing business together, if you feel its employees are below-average and don't know what they are doing. There is a limited number of competent people out there available for hire, and if a startup can't get some of those while it's small, it won't get any of them if it ever manages to grow bigger (and that growth probably would have been achieved by burning investor money anyway.)