Is Chime a Scam?

If you’re thinking of using Chime, you need to know: Is Chime a scam? 

Below, we explain whether Chime is a scam and discuss some steps you can take to improve your safety when using this service.

What Is Chime? 

Chime is an online-only financial technology company that partners with banks to offer its services. 

Despite not being a bank itself, Chime holds customer deposits in FDIC-insured accounts through its banking partners.

The company provides products like checking and savings accounts, debit cards, early paycheck access, fee-free overdraft protection, and a credit-building credit card. 

Is Chime a Scam?

No, Chime is not a scam. However, whether it’s a suitable option for you depends on a number of factors. 

Chime is a neobank, i.e., not a traditional bank. However, Chime partners directly with chartered banks that are FDIC-insured.

Your deposits with Chime are held at these partner banks, so they are covered by FDIC insurance up to $250,000 per depositor. This is known as “pass-through” insurance, i.e., your funds are in an FDIC-insured bank, not directly with Chime.

Chime has faced regulatory scrutiny and criticism over its practices in the past, including marketing issues regarding its use of the term “bank” and sudden account closures without notice.

In 2024, the Consumer Financial Protection Bureau fined the company $3.25 million for delays in returning customer deposits from closed accounts, plus an additional penalty related to poor handling of customer complaints.

Chime agreed to upgrade its customer service, which now includes a 24/7 support commitment. 

Even though Chime is not a scam, Chime users can be targeted by scams. There have been reports of scammers opening accounts using stolen personal information and criminals draining Chime users’ accounts. 

Chime gets a 4.7 out of 5.0-star rating (from 751,164 ratings and 10m+ downloads) on Google Play and a 4.8 out of 5.0-star rating (from 975,343 ratings) on the App Store.  

Chime gets a 1.3 out of 5.0-star rating (from 772 reviews and ratings) on Consumer Affairs and a 2.1 out of 5.0-star rating (from 1,407 rated reviews) on PissedConsumer. 

NerdWallet gives Chime a rating of 4.3 out of 5. 

Online user reviews of Chime are mixed.

Some users report having great experiences with Chime. 

For example, in one internet forum thread, the majority of respondents said they were using Chime as their main bank account without issues, with some saying they’d been using Chime for 5 to 7 years.

Others report having a terrible experience. 

One user said that someone was able to use their debit card number and use it to order prepaid debit cards under the Chime brand even though the name did not match theirs. 

Another said Chime did not reverse fraudulent charges for Circle K gift cards because their husband had used their Chime card at Circle K before. 

Security

On its security page, Chime outlines some of its security features, which include: 

• FDIC insurance. Chime offers FDIC insurance through its partner banks via a pass-through arrangement, which generally makes your deposits safe up to the insured limit. 
• Instant card blocking. You can immediately block your Chime debit and Credit Builder cards via the Chime app if they are missing or you suspect unauthorized use. 
• Real-time alerts. You can receive instant notifications for every transaction made with your Chime card and optional daily summaries so you stay updated on your account activity.
• Visa Zero Liability. Chime debit cards are protected by the Visa Zero Liability Policy, so you aren’t held responsible for unauthorized charges.
• Secure authentication. The Chime platform supports two-factor authentication and fingerprint authentication.

According to the Chime Google Play page, the Chime app encrypts data in transit. You can also request that your data be deleted. 

Privacy 

Chime’s Privacy Notice explains how it collects, uses, protects, and shares your personal information when you use it. 

Chime collects many types of information, including:

• Identifiers (e.g., name, address, Social Security number).
• Financial and employment details.
• Physical characteristics, demographic data, and similar details.
• Biometric data.
• Voice recordings.
• Social media handles.
• Device information.
• And more.

Data is gathered directly from you, automatically through your use of the site and app (via cookies, IP addresses, etc.), and from third-party sources.

Chime uses this information to provide you with its services, to process transactions, verify identities, personalize your experience, and for marketing and analytics. Having this data also helps with fraud prevention, legal compliance, and internal research.

Your data may be shared with Chime’s affiliates, bank partners (for account services), service providers, and third parties for joint marketing, analytics, and advertising. In some cases, disclosures are required by law or to protect against fraud.

You have options regarding communications, targeted advertising, and data sharing. 

Chime provides tools (such as a Privacy Hub) to opt out of certain data uses, including the sale or sharing of personal information. 

The Common Sense Privacy Program gives Chime privacy policies a “Warning” rating. This means Chime’s privacy policy “Does not meet our [the Common Sense Privacy Program] recommendations for privacy and security practices.”

Some of the issues highlighted by the Common Sense Privacy Program include the following:

• Unclear whether data is sold or rented to third parties.
• Data is shared for third-party advertising and/or marketing.
• Behavioral or targeted advertising is displayed.
• Data is collected by third-party advertising or tracking services.
• Data is used to track and target advertisements on other third-party websites or services.
• Unclear whether Chime creates and uses data profiles for data enhancement and/or targeted advertisements.

On the plus side, the Common Sense Privacy Program says that Chime provides processes to access and review your data and modify inaccurate data. It also uses industry best practices to protect data. 

So, Should You Use Chime?

Depends on your banking needs and preferences.

Chime could be a good fit if you value a modern, low-fee digital banking experience and can manage the potential drawbacks. 

However, if you require in-person banking support, you might want to stick to traditional banks. 

How to Use Chime Safely

• Understand FDIC coverage. Your funds are held in FDIC-insured partner banks, so if you have a balance nearing the $250,000 limit, consider how that might affect your overall risk.
• Enable security features. Turn on two-factor authentication and fingerprint authentication. Also, set up real-time transaction alerts so you’re immediately notified of any account activity.
• Monitor your account regularly. Check your transaction history often for any unusual activity.
• Block your card. Use the Chime app’s ability to block your card instantly if it goes missing.
• Use strong and unique passwords. Create a strong, unique password for your Chime account and avoid reusing it across other online platforms.
• Use the Chime Privacy Hub. You can use the Chime Privacy Hub to submit various opt-out requests, such as opting out of the sale, sharing, or targeted advertising of your personal information.
• Exercise state-specific rights (if applicable). Depending on where you live, additional opt-out rights may be available to you under your state’s privacy laws. Check your specific rights if you’re in states like California, Colorado, or Texas.
• Send specific email requests. If you have specific privacy or opt-out requests, you can contact Chime at privacy@chime.com for assistance.
• Stay informed. Keep up with updates from Chime regarding changes to policies or features and read through any security alerts or advisories Chime sends out.