Coinbase users slam new customer service phone support

LOS ANGELES – After thousands of customer service complaints, Coinbase has launched a new live helpline. But many customers remain frustrated with the company after its latest efforts to address their concerns.

Take Erick and Molly Richardson, for example.

The text message on Erick’s phone alarmed him so much that he pulled over to the side of the road. It was a sunny July afternoon.

The retired lawyer clicked on the message that someone had logged into his account. He logged in and quickly received an email stating that his two-factor authentication had been changed, meaning his security settings had likely been compromised.

Then the nightmare got worse.

He and his wife, Molly, had saved nearly $ 1.1 million in cryptocurrency. Suddenly, a fraudster started withdrawing all of his bitcoin investments, around $ 700,000, as Erick watched. And there was nothing he could do.

“I was in a panic. It was that feeling that I haven’t had for a long time,” Erick said, acknowledging that the text message was probably a phishing attack to get his account information.

The Richardsons couldn’t call Coinbase for help because when the account takeover happened in July, the company only offered email support. A CNBC investigation in August found that thousands of customer accounts were hacked and were left hanging by the company, according to government records and interviews. Coinbase, which went public in April, has a market cap of over $ 50 billion.

Since 2016, users have filed more than 12,000 complaints against Coinbase with the Federal Trade Commission, the Consumer Financial Protection Bureau and the Better Business Bureau, mostly related to customer service, according to public records. 1,500 additional complaints have been filed since August.

Other cryptocurrency exchanges have seen similar complaints, but fewer than complaints for Coinbase, which is the largest exchange in the United States.

Coinbase, responding to criticism that customers could not speak to anyone in the company, set up the live support line in August. However, dozens of customers whose accounts were hacked and gutted told CNBC that the so-called help failed to resolve their issue.

In the case of the Richardsons, Erick said it only took scammers about 20 minutes to withdraw 21 Bitcoins in 110 different transactions.

Erick reported the theft to Coinbase, who locked the account. But he said that for more than two months, no one had reached out to help the couple get their money back or unlock the account.

“I still have no idea how it went,” he said.

In September, the Richardsons called Coinbase’s new hotline. The agent told Erick he did not have access to the file and suggested he respond to the last email from Coinbase, which he had already replied to. The 10-minute call ended not with a resolution, but with more frustration.

“It was a joke; it just makes me a little more angry. And there’s nobody who has decision-making power in customer service,” Erick said. “They just can’t help much. Do you know what Coinbase did two days after my hack? They sent me a customer survey and asked me to rate their service.”

Coinbase customers across the country have told similar stories to CNBC since the live phone support began.

For example, customer Marc Boulos said in an email that “live support is only for accounts that are actively locked; since my account is no longer locked, I can’t even access support. live even if I try to do it “.

“The system recognizes that the account associated with my phone number is not locked and does not allow me to access live support,” Boulos wrote.

Another customer, Don Pirtle, called the phone line a “joke.”

And after an unsuccessful attempt to restore access to his account, customer Conrad Yiu said, “It seems they failed in every game.”

A spokesperson for Coinbase said in a statement that the company will provide “global phone support to all customers and live messaging by the end of the year. Our goal is to be the most trusted platform. most reliable and easy to use in the crypto economy, but we recognize the challenges some of our customers have experienced with their Coinbase accounts. Improving our customer experience remains a top priority. “

“In most cases, Coinbase does not cover losses resulting from unauthorized access to Coinbase accounts due to a breach,” which is often a phishing attack, the statement said.

Earlier this month, in a note to Coinbase customers, the company revealed that funds were stolen from around 6,000 customers in a phishing attack that ran from March to May 20. Hackers “took advantage of a loophole in Coinbase’s SMS account recovery process to receive a two-factor SMS authentication token and gain access to your account.”

A spokesperson for the company said, “We immediately fixed the loophole and worked with these clients to regain control of their accounts and reimburse them for any lost funds. These large-scale sophisticated phishing attacks are on the increase, and we strongly recommend anyone who uses online financial services to remain vigilant and take the necessary steps to protect their online identity. “

When asked about the security of Coinbase accounts, the spokesperson said: “Although some Coinbase customers have unfortunately been victims of phishing attacks and account takeovers, at no time have the attackers breached the Coinbase’s security infrastructure. ”

Experts say there are other ways to store cryptocurrency that are essentially hack-proof.

One move that would have helped protect the Richardsons and others is to move cryptocurrency from an exchange, like Coinbase, to what’s known as cold storage, or moving crypto offline.

“I fought every day because I have my friends’ voices in my head. ‘Erick, put him in a cold room.’ And I just didn’t do it, ”Erick said.

Nicole DeCicco, who helps customers secure their cryptocurrency through her company CryptoConsultz, says cold storage is virtually hack-proof. Crypto owners get a private key, which is like a password, to store that key offline.

“A cold storage or a cold wallet is completely disconnected from the internet. Sometimes it’s a device that you connect to your computer,” she said. “When you keep your funds in a cold store, you own those funds.… They’re offline, away from hackers.”

“I like to tell my clients that just like you can withdraw money with your ATM card, you can always load from your cold storage wallet into a hot wallet. But if we are talking about a sum of Important money, it’s really the best practice is to keep it in a cold store, ”she said.

DeCicco said setting up swap accounts is easy, but setting up cold storage takes more work. To set up a cold room, many investors buy a device for this purpose. It should then be loaded with a private key and stored securely, like in a safe.

While cold storage is safer, it has its own issues. Owners can lose their passwords or the device can crash.

The Richardsons, after further email exchanges with Coinbase, said access to their account has finally been restored. And the company sent them money back.

But it was not what they expected. The company put $ 500 worth of Bitcoin into their account.

“It was like they kicked me in the face,” said Erick Richardson. “Is there even someone senior at Coinbase looking at this? Someone does a math and says, ‘OK, that’s what happened to this guy. He lost 21 bitcoins. Let’s give him $ 500. “

Please email advice to [email protected].

– CNBC Angelique Serrano-Romain and Nadine El Bawab contributed to this report.

Correction: Erick and Molly Richardson had saved almost $ 1.1 million in cryptocurrency. An earlier version distorted the figure.