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PerkStreet Shutting Down Operations

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Perkstreet LogoPerkStreet is shutting down its operations. According to their website, they were pursuing investment the last six months and failed to do so. They’ll be shutting down. PerkStreet offered a checking account that had a debit card with 2% rewards – twice that of most other debit reward cards. It was a pretty compelling offer but it appears not compelling enough.

What Happens to Account Holders?

It depends on your account number and debit card number. Some account holders were with PerkStreet Financial and others were through Provident Bank.

If your debit card began with 5519 or your account number began with 123, you had a PerkStreet Financial account. These accounts will remain with The Bancorp Bank and your accounts will not be shut down, even though PerkStreet will close on September 26th. You will be able to access your account at this site.

If your debit card began with 5507 or your account number began with 234, you have a Provident Bank account and this account will be closing on September 26th. You will need to move your money out of that account before then and once you hit $0, they will close the account for you. Effectively immediately, you will no longer have overdraft protection and by September 11th, most everything else will be terminated (bill pay, ACH transfers, check deposits, etc.).

What About the Rewards?

Sadly, they’re gone too effectively August 12th. If you requested a redemption prior to the 12th, you will be able to get it but anything afterwards is gone. Things have been getting kind of ugly on the PerkStreet twitter page about the fact that the rewards are all gone. PerkStreet says they simply don’t have the money to do so.

You might be wondering if it’s “legal” to withhold rewards… I believe it is. If PerkStreet is going bankrupt then you would become a creditor. If they’re just shutting down, then there’s no one to collect from. Either way, sadly, your rewards are gone.

What can we learn from this? I’ve been pretty active in personal finance and talk to a lot of other bloggers – no one saw this coming.

{ 9 comments, please add your thoughts now! }

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9 Responses to “PerkStreet Shutting Down Operations”

  1. mike says:

    Screw u perkstreet…i was just about to redeem my perks last week but decided to hang on until Christmas…what a waste of my time you have been.

  2. Thomas says:

    Wow talk about sucking!! That is a hard pill to swallow for the customers and the company. I don’t know how to even think about what I would need or have to do if something like that happened to our bank. Thanks for the info.

  3. David says:

    Wow. Very sad, as i thought perkstreet was something unique, like the business people at SmartyPig. I did know that The Bancorp, their major bank partner, is primarily a bank that hold deposits on prepaid bank cards. Theyre like MetaBank, GE bank, maybe even like Greendot.
    How many PS customers are we talking about? How much venture, private cash did PS burn since they started around 2008? How many employees at PS in Boston are affected? I’d guess…About 15k. About $16 mill VC and private money. About 30 FTE. Highland Capital, there large institutional investor, must’ve lost a lot and don’t want to lose more. I wonder how much $cash they had in revenue in 2010 versus 2012?!?
    Sources:
    http://www.americanbanker.com/issues/178_155/fintech-startup-perkstreet-financial-to-close-operations-1061275-1.html
    http://www.boston.com/business/articles/2011/01/16/boston_start_up_offers_a_different_twist_on_banking/
    http://www.boston.com/business/articles/2011/07/17/proliferation_of_financial_start_ups_could_give_consumers_more_options/

  4. This just sucks. It plain and simply blows.

  5. Meh, what a waste of a product that seemed to go down really well with the customers! Will be tough for someone else to attract those customers now that this has happened.

  6. Brad Canel says:

    “Keep on perk’n”

    Apparently not. LOLOLOLOL!

  7. This one was definitely a big surprise. I was just writing a great review for their business model. I guess I don’t have to finish that one up. I told a lot of people about their banking product and many went over there. Sorry to see them go and I know many customers are pissed.

  8. Steve says:

    Not a real surprise. No investor wants to dump more money into this business model; it doesnt work with the fierce bank competition and bank regulations. The lesson: “What’ is in your wallet?” Credit cards that earn 1-5% cash back rewards from the megabanks. Cash sits in online account with interest, and free access and fee reimbursements at ATMs. It’s always sad to hear another bunch of workers will be unemployed and collecting some MA unemployment benefits. Hopefully they find jobs at other startups, or even the megabanks (again for some).

  9. David says:

    Glad I jumped ship a while ago to Ally Bank. Their debit card rewards were not enough to offset the disadvantages of banking with PerkStreet when compared with other banks: no using your smartphone to instantly deposit checks, 10% cost to redeem perks in cash, reordering checks costs money, no interest on your accounts, and a bunch of other things I forget but helped me decide to switch.


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