If It Seems Too Good To Be True, It Probably Is: The 7 Biggest Financial Scams in American History

From the Wild West to Wall Street, the tradition of fast-talking confidence men pulling a fast one on unwitting customers is American as apple pie. In the search for a great deal or a phenomenal return on their investments, it’s all too easy for even the savviest consumers to fall prey to fraud — and this holds even more true in this brave new world of anything-goes online content.

Besides a healthy dose of skepticism whenever you get an email about a “sweet new investment opportunity” from a “deposed Nigerian prince,” hearing the scoop on previous scams could help you avoid becoming a victim: the past repeats itself, after all, and some of these swindles aren’t quite so easy to detect.

Without further ado, we present the seven biggest financial scams in American history. A quick note on methodology: we define “biggest” as the total dollar value lost, adjusted for inflation when necessary. This effectively limits the scope of our list to the past one hundred years.

  1. WorldCom

Total losses to investors: ~$100 billion

Led by CEO Bernie Ebbers, by the late 1990s WorldCom was the second largest telecommunications company in the United States, employing an aggressive growth strategy to gobble up competitors. But the company began to show signs of trouble during the market downturn that began in 2000.

In 2002, a small team of internal auditors uncovered evidence that Ebbers and members of his executive team had employed fraudulent accounting methods beginning in the early 1990s, eventually inflating WorldCom’s assets by a whopping $11 billion in order to maintain the value of the firm’s stock. WorldCom filed for Chapter 11 bankruptcy protection in 2002, and its stock price plummeted from $64 to $1, costing its investors nearly $100 billion.

Lesson learned: This scam would have been tough for an average consumer to avoid; it’s always a shock when a company that seems like a “blue chip” goes under. One lesson is to avoid investing in individual stocks and instead buy index funds, which broaden your exposure so you’re less affected by unpredictable tail risk.

  1. Enron

Total losses to investors: ~$74 billion

Before the name Enron became synonymous with fraud, the Houston-based energy and services company was the darling of the financial press: in the late 1990s, Fortune magazine named it America’s Most Innovative company for six consecutive years.

But in the fall of 2001, skeptical reporters began to peel back the morass of corrupt practices underlying Enron’s soaring stock. The company’s CEO and COO, Ken Lay and Jeffrey Skilling, and other executives had cooked the books in countless ways, hiding billions of dollars in debt from business failures within opaque corporate entities that never showed up on the company’s balance sheet.

Once the extent of the scandal became clear, Enron’s stock plummeted from a high of $90 in mid-2000 to below $1 by the end of 2001, wiping out close to $75 billion in shareholder value. The Enron scandal was so unprecedented in size and audacity that it led to the creation of new legislation — the Sarbanes-Oxley Act — which increased penalties for defrauding shareholders.

Lesson learned: Again, it’s tough for everyday investors to dig deep enough to uncover this kind of fraud, so the best way to protect yourself is diversifying your investments.

  1. Madoff Securities

Total losses to investors: ~$64 billion

One of the most recent major swindles to grace the newspapers, Bernard Madoff ran an exclusive investment fund that produced unusually steady returns — about 10% — for decades, in good markets and bad. His statistically improbable consistency prompted many in the investment management industry to wonder about his investment strategy.

In one of the most dramatic revelations of 21st finance, Madoff’s own sons discovered that Madoff Securities was in fact a giant pyramid scheme. For decades, Madoff had used a constant stream of new investments to pay out his old investors, but his lie couldn’t sustain itself when the 2007-08 financial crisis incited his investors to ask for their money all at once.

Prosecutors estimated that Madoff’s liabilities to his investors were on the order of $64 billion; the damage was made worse by the fact that many of his investors were charitable organizations. Madoff is currently serving a jail sentence of 170 years.

Lesson learned: Most of Madoff’s investors went along when he refused to give them any details about his investment strategy. If someone tells you they can make you money but refuses to tell you how, run away as fast as you can.

  1. Bayou Hedge Fund Group

Total losses to investors: $350 million

One of the more dramatic scams on our list, Sam Israel promised his investors that the $300 million they invested with him would multiply more than twenty times into $7.1 billion over a ten year time horizon.

When the investments began to underperform in 1998, Israel lied to his investors and then made a break for it, only getting arrested when his mugshot appeared on America’s Most Wanted. Unfortunately, by this point his investors were out more than $300 million.

Lesson learned: If someone promises you an investment return that’s too good to be true, it probably is.

  1. Financial Advisory Consultants

Total losses to investors: $311 million

Over the course of two decades, James Paul Lewis Jr. collected hundreds of millions of dollars from investors, often elderly retirees. Relying on trust and word of mouth to build a reputation for his innocuously-named company, Financial Advisory Consultants, Lewis told clients he was investing their money. Instead, he used it to fund a high-flying lifestyle, blowing client money on luxury cars and fancy homes.

In 2003, investors raised the alarm when Lewis stopped paying dividends; soon after, he went on the lam, eluding authorities until 2004, when a FBI manhunt cornered him in Houston. In 2006, a judge judge imposed the maximum sentence of thirty years on Lewis; at the time of his sentencing he was sixty years old, around the age of many victims who lost everything.

Lesson learned: Diversify — never put all your investments in one basket! Try to insist that your investment managers have their funds audited by an independent third party.

  1. Charles Ponzi

Total losses to investors: $20 million (~$230 million today)

The original swindler, Ponzi was a habitual schemer who now has the unfortunate distinction of having a whole category of fraud named after him. Back in 1920, Mr. Ponzi promised investors a 50% return in 45 days by buying discounted postal coupons in other countries and reselling them — a promise he fulfilled, for the first few investors, by paying them with funds received from new investors.

News of Ponzi’s “strategy” spread fast, and soon even banks sought to get into the deal. But as is the case with all pyramid schemes, Ponzi’s endeavor reached an explosive end when his publicist found evidence that indicated Ponzi was simply “robbing Peter to pay Paul.” He went to jail.

Lesson learned: The more “exotic” a money-making scheme is, the more likely it is to fail or be totally made up — especially when pitched by an amateur with no real experience.

  1. Stratton Oakmont

Total losses to investors: $200 million

If this name sounds familiar, it’s because Stratton Oakmont was the brainchild of Jordan Belfort, the erstwhile “Wolf of Wall Street.” Operating as a classic “pump-and-dump” scheme, Belfort and his accomplices would cold call unsuspecting consumers and convince them to buy penny stocks, driving up the price until Belfort’s own firm could cash out and send the stock plummeting back to bottom.

After a wild ride through the 1990s, the firm and its principals were indicted for securities fraud by the SEC in 1999.

Lesson learned: Don’t buy stocks because someone told you so, especially not a random person on the other end of the phone; do your own research and draw your own conclusions. If that’s not a process that appeals to you, buy passive index funds instead.


These gargantuan frauds are the ultimate example of the cardinal rule of investing: “caveat emptor,” or buyer beware. It pays to do your diligence on big investment opportunities, but consumers also experience millions of minor instances of “fraud” every day, from overdraft charges and other hidden fees to getting overcharged by your cable company.

Trim can help you find dubious charges and get your money back — give us a whirl here.


How Elizabeth Warren Took Down the CEO of Wells Fargo, And Why It Matters


On paper, John Stumpf was one of the last folks you’d expect to end up running the biggest bank in America. He grew up as one of eleven children on a poultry and dairy farm in Minnesota, sharing a single bedroom with his brothers and waking up at 4:30am to pick eggs in the family henhouse. After graduating in the bottom half of his high school class, he worked as a breadmaker in a small-town bakery before gaining admission to a state university.

Stumpf started out in the world of retail banking at the very bottom of the ladder, working as a repo agent for a local institution, but he moved up fast. Six years later, he joined Northwestern National Bank, leading it on a string of acquisitions that culminated in a 1998 merger with Wells Fargo.

Throughout his early years in banking, Stumpf honed a plain-spoken mantra for growth that would come to define his career in ways both good and bad: “There are only three ways a company can growearn more business from current customers, attract more business from competitors, or buy other companies.”

This strategy seemed to work. In 2008, Wells Fargo’s acquisition of Wachovia would double its footprint, creating one of the largest banks in the world. By then, Stumpf was CEO, and counted luminaries like Warren Buffett among his friends and bridge partners; through his investment vehicle Berkshire Hathaway, Buffett would later become Wells Fargo’s largest shareholder.

Stumpf’s rise from farm boy to top executive is the stuff of the quintessential American Dream—and perhaps that’s one reason why his fall from grace has taken on such a Shakespearean quality. On October 12, 2016, John Stumpf resigned as CEO of Wells Fargo. The end of his career roughly coincided with the end of Wells Fargo’s reign as the most valuable bank in America by market capitalization, a three-year run which had screeched to an abrupt halt less than a month before.

In different ways, both of these outcomes were catalyzed by one woman who shared his middle-class roots but took a very different path: Elizabeth Warren, a Harvard Law School professor and the senior U.S. Senator for Massachusetts.

The Senator

Some people may not know that Elizabeth Warren is one of the top five cited law professors of all time in her field of specialization—bankruptcy. Beyond her recent appeal as a popular senatorial standard-bearer for progressive social policies, it’s safe to say she knows a thing or two about how badly things can go wrong if consumers aren’t protected.

In 2007, then-professor Warren proposed the Consumer Financial Protection Bureau in a paper entitled “If It’s Good Enough for Microwaves, It’s Good Enough for Mortgages.” The agency was conceived as an analogue to other regulatory bodies like the Federal Trade Commission, but with a focus on protecting Americans in their everyday dealings with the financial institutions that issue their credit cards and underwrite their mortgages and student loans.

As the scale of the damage wrought by subprime mortgages made itself known, culminating in the financial crisis and the Great Recession, Warren’s proposal took on a new resonance. In 2010, the CFPB was officially brought into being by the Dodd-Frank Act, with the mission of protecting consumers from “unfair, deceptive or abusive practices” and “taking action against companies that break the law.”

Warren was supposed to lead the new regulatory body, but Republicans blocked the nomination, fearing that she would be too litigious; President Obama nominated the former Attorney General of Ohio, Richard Cordray, instead.

Instead, Warren ran for the Senate in 2012 on a wave of support from Democratic lawmakers, defeating the Republican incumbent Scott Brown to regain Ted Kennedy’s old Senate seat.

Now, Senator Warren was in a position to put her consumer advocacy chops into practice. Her years in the legal world and in politics would culminate four years after her election, when she found herself face-to-face with John Stumpf at a Capitol Hill hearing on September 20th, ready to take him to task for the largest bank fraud in the post-financial crisis era.

The Scam

What the heck was going on at Wells Fargo?

It turned out that the bank’s rosy growth had disguised a silent plague: over the past several years, more than five thousand Wells Fargo employees perpetrated what can only be described as a gigantic scam against their own retail banking customers, signing them up for fee-generating accounts without their permission or knowledge.

These employees went so far as to create phony emails and PINs to register new accounts for their customers, transferring money to the new accounts without permission. Already derided for their lack of transparency, “normal” bank fees were bad enough—and now Wells Fargo customers were paying even more for services they never wanted in the first place.

Did thousands of line employees independently decide to swindle their customers? Far from it: Wells Fargo relentlessly incentivized its staff to push additional financial products, or “solutions,” on existing customers.

The bank imposed strict daily sales quotas on employees, and established a sales target mandating that each Wells Fargo customer should have eight separate accounts with the bank. The rationale for this goal? As expressed in Wells Fargo’s 2010 Annual Report, it was because “eight rhymes with great.”

And for a time, things were great. This practice was enthusiastically and euphemistically described by Stumpf as “cross-selling” on the quarterly earnings calls that saw Wells Fargo stock soar over the past five years. The first pillar of Stumpf’s growth philosophy was largely responsible for Wells Fargo pulling ahead of its peers: the bank’s industry-topping cross-sell rate was lauded in the analyst reports that catapulted the bank’s market capand Stumpf’s stock-based compensationto new heights.

The Downfall

That is, until the Consumer Financial Protection Bureau (CFPB) announced a record-shattering $185 million settlement with Wells Fargo on September 8th, 2016, including a $100 million fine and full restitution for consumers who paid fees for financial products and accounts they never wanted.

This settlement was the culmination of an investigation that began in 2013 with an expose by the Los Angeles Times. In their complaint, the CFPB estimated that more than 1.5 million fake deposit accounts had been created for Wells Fargo customers, incurring more than $2 million in unauthorized fees, along with more than half a million fake credit card applications. In addition to the excess fees, victims of the scheme suffered damage to their credit scores.

In a day, Wells Fargo’s reputation as a tightly-run ship, a profitable investment and one of the “cleanest banks around” took a dramatic hit. As the bank’s stock began to dip, Warren Buffet, the largest shareholder, lost more than a billion dollars.

Without the watchful gaze and punitive action of the Consumer Financial Protection Bureau, it’s unclear how long it would have taken for a regulatory body to step in and investigate the allegations levied against Wells Fargo. Senator Warren’s new institution clearly demonstrated its willingness to make big moves in protecting consumers against “unfair or deceptive practices.”

But the fine wasn’t the end of the story for Wells Fargo or its leadership. On September 20th, Stumpf was summoned to testify in front of the Senate Banking Committee, facing down a bipartisan group of senators united in their ire against the culture and incentive structures that engendered fraud at such a massive scale.

And then Senator Warren took her turn at the microphone. What followed was a takedown of legendary proportions. Brushing aside the excuse that fake accounts were perpetrated by a few (thousand) bad eggs within the company, Warren asked why no senior leaders at Wells Fargo, including Stumpf, had been punished or returned their personal earnings in light of the scam. He didn’t have an answer.

After taking Stumpf to task for “gutless leadership,” Senator Warren closed with this statement: “The only way that Wall Street will change is if executives face jail time when they preside over massive frauds. We need tough new laws to hold corporate executives personally accountable and we need tough prosecutors who have the courage to go after people at the top.”

Stumpf didn’t resign right then, but the damage was done: Warren’s barrage went viral on social media. After a second Congressional hearing that went no better than the first — in which lawmakers called Wells Fargo a “criminal enterprise” and compared it to Enron — the calls for Stumpf’s resignation grew louder, until he finally heeded them on October 12th.

Why This Matters

Financial institutions have scammed their customers in the past. The most notable and recent example is the 2007-2008 financial crisis, which stemmed from a large-scale victimization of uneducated consumers who were saddled with home loans that they couldn’t afford. Despite the scale of the carnage, very few executives resigned, none went to jail, and most CEOs of banks that survived are still leading those institutions today.

Responsibility is easy to share in good times, but becomes a slippery concept when things are going south. You could make the argument, as John Stumpf attempted to, that Wells Fargo’s leadership wasn’t directly responsible for creating fraudulent bank accounts, and that the blame lay primarily with “overzealous” employees who did the clicking.

But the culture Stumpf created, as CEO, had a far larger impact on the well-being of his customers than if he had been banging the keyboard to create fake accounts himself. 

It may be fair to assume that Stumpf truly meant well with his imperative to cross-sell, but ignorance of the negative externalities of a strategy is no excuse. Stumpf’s inability to take immediate responsibility, to show with deeds instead of words that the buck stopped with him, ultimately doomed him. With her uncompromising repudiation of Stumpf’s negligence — and by championing the CFPB, long before her senatorial career began — Elizabeth Warren has ensured that CEOs of financial institutions everywhere will look a little closer at the risks their business plans pose to consumers, even when their stock is soaring.

Thanks to Senator Warren and the rise and fall of John Stumpf, leaders of financial institutions are painfully aware that there are consequences at the top for deceptive practices, which means that Americans can rest a little easier.

Infographic: The Wide World of Banking Fees

How do banks make money from consumers? Surprise, surprise: it turns out that miscellaneous fees are a massive revenue driver for the retail banking industry. Overdraft fees alone constituted a whopping 8% of total net income in 2015—at least for big banks with over $1 billion in deposits, which are required to disclose their sources of revenue to the Consumer Financial Protection Bureau.

Overdraft and ATM fees are the worst offenders by sheer volume, but banks subject their customers to tons of other fees. No one’s saying that banks aren’t entitled to make a buck, but some of these fees seem questionable, to say the least. We made an infographic to break down all the ways your bank can charge you:


There are ongoing discussions at the Consumer Financial Protection Bureau about whether regulators should cap these fees. We would applaud that kind of change, but for now, when it comes to overdraft fees, Trim can help get your money back. Sign up for Trim to monitor your spending and put ridiculous fees back in your pocket.

What President Trump Means For Your Money: 5 Key Takeaways

Early this morning, we joined the ranks of Americans who were surprised — to say the least — by Donald Trump’s victory over Hillary Clinton in the presidential election. Whether you love or hate the president-elect, it’s impossible to ignore the fact that his proposals, such as they exist, will have substantial ramifications on the U.S. economy both in the short and long term.

If you’re wondering what this stunning development portends for your money, we’ve got some advice on managing your finances in the era of President-elect Trump. Here are five tips from our team:

  1. Don’t make any sudden moves

American financial markets went on a wild ride in after-hours trading last night, with Dow Jones futures falling more than 800 points as Clinton’s softness in key swing states became apparent. The global markets echoed this uncertainty, with key Asian benchmarks seesawing as traders awoke to a Trump win. It’s clear from the reaction that investors around the world expected a Clinton victory, and if there’s one thing the markets hate, it’s unpredictability.

For the moment, U.S. equities seem to have bounced back close to pre-election levels, but one thing is clear: the markets will be incredibly volatile over the next few months. This is because we don’t know which of President-elect Trump’s many campaign promises will actually be enacted; some of them are pro-growth, like infrastructure spending, and some could be disastrous, like imposing broad trade tariffs. We also don’t know much about the executive team he will assemble, notably the Secretary of the Treasury, who will play a key role in defining the Trump administration’s fiscal policy.

Timing the market is incredibly difficult, even for professionals. We suggest that either selling or buying assets on the basis of the immediate election result is premature. Neither panic nor elation is a good strategy. You should sit out the short-term madness and stick to your long-term investment plan.

  1. Interest rates will probably stay low

Given the volatility that has only just begun to rear its head, the interest rate rise which the Fed had teased for December will probably not happen. The next opportunity for rates to rise is March 2017. That said, if the market settles, the Fed may still push rates up a quarter of a percent as planned. For now, we’d say that if the prospect of rising interest rates was a factor spurring any personal financial decisions, like refinancing your mortgage, you can rest easy and take your time for now.

  1. Explore your options for health insurance

It’s unclear whether President Trump will carry out his long-voiced threat to dismantle Obamacare and replace it with “something way better,” but with a Republican Senate and House on his side, as well as the looming prospect of a conservative Supreme Court, a successful challenge to the Affordable Care Act is well within the realm of plausibility. If you are currently on an Obamacare plan, start looking for alternatives: through your spouse or your parents if you’re under 26, or by placing a premium on employer benefits in the job hunt.

If you have an HSA or other medical savings account, it might be wise to max out your contribution to ensure sure your health needs are covered.

  1. Personal taxes are likely to go down

With full Republican control of Congress, President Trump will likely push through a package of across-the-board tax cuts. This could be detrimental to the economy in the long-term as the deficit increases and our national debt continues to mount, but in the short-term, it will increase household consumption and create growth.

Another likely change is the repeal of the estate tax: under the current laws, you pay 40% on the excess value of any estate worth more than $5.45 million.

Finally, with corporate taxes being reduced to a flat 15% for all businesses under Trump’s tax plan — including sole proprietorships and S Corporations — independent contractors are going to be in great shape, tax-wise. Top wage earners could go from a marginal tax rate of close to 40% under the current tax scheme to paying a mere 15% as contractors under the Trump tax plan. This could have a tremendous impact on the “gig economy,” making it a far more appealing proposition to work for Uber or Instacart.

  1. We repeat: volatility is the new normal

This is probably not the best time to take any major risks with your finances. Again, we’re not sure about the ultimate financial implications of a Trump presidency, and this is precisely why it’s a good idea to batten down the hatches. It would be wise to put off major discretionary purchases for the time being. Make sure your emergency fund is fully stocked and cut down on unnecessary consumption.

These basic rules of personal finance apply even more strongly when unpredictability reigns; a little prudence will ensure that you make it through the next four years in great shape, no matter what President Trump has in store.

7 Lessons from The Richest Man in Babylon

The Trim blog is pretty great, but we want to help you discover other awesome sources of personal finance wisdom. This is the first entry in a series that brings you key lessons from classic books about personal finance.

Written in 1926 by George Samuel Clason — and currently available on Kindle for $1.99 — The Richest Man In Babylon is the original guide to personal finance. And unlike the dry textbooks that are published in droves these days, it tells a great story.

The Richest Man In Babylon is structured as a series of parables set in ancient Babylon, centered around the story of two friends who set out on a mission to ask their wealthy former classmate just how he got so rich.

We love this book because it provides powerful lessons of personal finance in a simple, entertaining way. Here are seven of our favorite pieces of timeless wisdom from the book:

  1. “Start thy purse to fattening”

This is the big one: don’t spend all the money you make and pay yourself first! The rich old man in the book recommends that you “save one piece of gold for every ten you earn.” It’s a little easier than putting gold under your mattress these days, of course; there are tons of services that auto-transfer money from your checking to savings account, helping you save ten percent of your income a few dollars at a time.

  1. “Control thy expenditures”

The best way to make sure you have an extra “piece of gold” to save is to not spend it in the first place! You can use Trim to cancel old subscriptions, fight overdraft fees and earn back money to save.

  1. “Make thy gold multiply”

In a word: invest! The market has been volatile lately, but instead of buying individual stocks, you can’t go wrong by putting your money in a passive index fund that tracks the overall stock market. Vanguard has a few great options.

  1. “Guard thy treasures against loss”

A simple one at heart but not always easy to put into practice: don’t be a sucker! Avoid making risky loans or investing in pie-in-the-sky ventures that you don’t understand.

  1. “Make of thy dwelling a profitable investment”

This piece of advice suggests that you should invest in your own home as soon as possible, instead of paying a landlord. We’d say that the rent vs. buy decision depends on where you live and your lifestyle and financial goals — but given the existence of big tax breaks for homebuyers and low interest rates, we’re inclined to agree.

  1. “Insure a future income”

Some of the most important words of wisdom on the list: make sure to save up for retirement! We think that rather than investing in risky mutual funds, buying a set of passive index funds is the way to go. If you have a family, buying life insurance is important, too.

  1. “Increase thy ability to earn”

Possibly the most non-intuitive but crucial piece of advice from the rich old man in Babylon: improve yourself and you’ll improve your earning potential. Set concrete goals, pay your debts promptly, pursue education and deal with folks honestly, and you’ll massively amplify your financial — and personal — success.

We think that following these principles is a great start to achieving financial success, and we want to help. Sign up for Trim to cancel subscriptions, fight fees and get money back.

Why Companies Love Selling You Subscriptions


Here’s a trend you’ve probably noticed — in all likelihood, it’s the reason that you clicked this link and made it here to the Trim blog. The trend is simple: as consumers, we are living in the most subscription-saturated era in American history.

The average Trim user who signed up for our service within the past 90 days has 6.0 subscriptions on their credit card, not including utilities and payments to financial institutions (like student loan servicers). It’s hard to find historical records on the popularity of subscriptions with the U.S. population, but we do know that in the 90 day period that started exactly a year ago, the average new Trim user only had 5.4 subscriptions.

Imperfect data aside, we’ve heard qualitatively from hundreds of users who are drowning in more subscriptions than ever before. The movement even has its own name: try Googling “subscription economy” or “digital membership economy.”

But why is this the case? It turns out that there are several reasons why consumer businesses have followed the lead of their enterprise counterparts in pivoting to recurring revenue business models. Some of these factors reflect the changing nature of consumer consumption in a digital world; others smack of “revenue optimization” at customer expense, literally.

Read on for the top five reasons that consumer businesses love selling subscriptions:

  1. Predictable Revenue

There’s nothing that the finance department at a major corporation loves more than recurring revenue. With less fluctuation in the month-to-month take of the business, companies have a far more stable platform to make decisions, from hiring to inventory.

These factors alone make it extremely tempting for consumer-oriented businesses to move to subscription pricing, even if it’s not necessarily an intuitive choice for the consumer.  

  1. Increased Switching Cost

Subscriptions are hard to cancel and that’s a fact. How many times have you remembered a “free trial” way past its expiration date and rushed over to the computer, clicking through 15 menus only to find that you need to “phone a representative” to cancel?

Many companies, including otherwise reputable services like the New York Times, deliberately make it difficult to cancel your subscription in the hope that it’s just too much work. This is the whole reason we started Trim: there is literally zero benefit to the consumer in making cancellation difficult and it needs to stop.

  1. Lower Barrier to Upsell

From a business’s point of view, one of the best side effects of having your credit card on file is that they can easily sell you new things. Maybe your monthly craft beer club crate wants to convince you to switch a more expensive selection — it’s as easy as convincing you to click a button and boom, ten more bucks a month.

  1. The Internet Makes Anything Easy to Subscribe

Ten years ago, the thought of subscribing to a physical product like razor blades would have been very strange. But the Internet has made it far easier to manage the nuts and bolts of a subscription business, from customer management to shipping. There are even companies that exist to make it easy for anyone to make a subscription box that they can sell to others.

  1. Subscriptions Are More Profitable

The lifetime value — which is a fancy phrase for total profit — of subscription customers is greater than customers who buy a product or service one at a time, when they need it. This is due to a combination of the reasons above, and it is the single biggest reason why consumer businesses will stop at nothing to become part of the subscription economy.

The Bottom Line

To be fair, subscriptions aren’t always bad for the consumer — they add a layer of convenience and seamlessness to products and services that you know you’ll need.

As the winners of our most loved subscriptions ranking show, the key to a great subscription business lies in delivering true value to customers. Companies that force subscriptions on their customers simply because it’s “better for business” are doomed to fail. These consumers will find different options, and we can’t wait to help.

Check out your subscriptions — and cancel the crappy ones — by signing up for Trim.


The Ten Most Loved Subscriptions in America: 2016


Our mission at Trim is simple: build tools that help consumers avoid financial death by a thousand cuts, perpetrated by corporations that have made a science out of nickel-and-diming their customers with obscure fees and recurring charges.

To date, we’ve helped almost 50,000 users cancel subscriptions that will save them a collective $6 million per year. We’ve used this data to expose some of the worst culprits: credit agencies, gyms and financial institutions all make the bad list of subscription products that are insta-canceled by anywhere from 10-35% of subscribed users on the Trim platform.

But we’ve also been impressed by the “good” subscriptions — the recurring charges that our users review on their Trim dashboard with a smile (we assume) and rarely cancel.

As such, we’re proud to announce our inaugural ranking of the Ten Most Loved Subscriptions in America. These are the ten subscription products that Trim users were least likely to cancel in 2016.


In order to be included on the list, the service in question had to have at least 250 subscribers on Trim. We don’t count recurring payments to utilities (including phone companies) or financial institutions (i.e. credit cards, student loan servicers or mortgage banks) as subscriptions. Note that this ranking is biased towards the preferences of our user base, which skews young (25-34).


We want to do our part to encourage companies selling subscriptions to be transparent, easy to cancel, and provide clear value to their customers. Though it’s not a perfect heuristic, we think a great measure of these qualities is whether or not a customer asks Trim to cancel a subscription as soon as we remind them of it.

To manage your own subscriptions and more, sign up for Trim. For now, without further ado:

The Ten Most Loved Subscriptions in America: 2016

  1. Netflix

Subscribers on Trim: 11,948

Netflix is the king of consumer-friendly subscriptions. More than half of active Trim users have a Netflix account, and with a miniscule single-digit cancellation rate, it’s clear that Netflix customers don’t plan to give up their access to Stranger Things any time soon.

It’s important to note that not all entertainment or content providers share this level of loyalty: contrast Netflix to Audible, for example, which suffered a cancellation rate more than twice as high among Trim users.

  1. Steam Games

Subscribers on Trim: 500

It comes as no surprise to see Steam on this list, considering the deep loyalty that many gamers have to the largest digital distribution platform for PC gaming. The launch of Valve Corporation’s first VR headset, the HTC Vive, has probably only increased the product’s enduring popularity with its users.

  1. Spotify

Subscribers on Trim: 6,844

Spotify is the reigning streaming audio provider on our list. Nearly one-third of active Trim users have a Spotify account, with competitors (YouTube Red, Pandora, Google Music) lagging in both cancellation rate and subscriber count, at least in our sample.

  1. ADT Security

Subscribers on Trim: 776

The venerable security monitoring and services company holds the number four spot on our list. Our guess is that safety is an “inelastic” good, meaning that folks who have a security system tend to hang onto it, regardless of the cost. Either way, we’re impressed with ADT’s ability to retain their customers — no other security provider came close.

  1. Zipcar

Subscribers on Trim: 724

Given the increasing ubiquity of ridesharing services around the country, millennials (who form the bulk of our users) are less likely to own their own vehicles than any point in history. An intuitive side effect of not owning a car is that you’re much more likely to subscribe to a ride-sharing service like Zipcar, which handily takes the number five spot on our list.

  1. PlayStation Network

Subscribers on Trim: 680

The PlayStation Network cements its leading status with console gamers, taking the number six slot in our ranking. With blue chip games like Final Fantsy XV that feature multiplayer modes making their home on the platform, and the recent launch of the PlayStation VR headset, we expect a strong showing from PSN in future rankings, too.

  1. Xbox Live

Subscribers on Trim: 448

Continuing the trend of gaming services with a strong showing on this list, Xbox Live edges into the number seven spot on our ranking. With no shortage of awesome multiplayer content — Overwatch comes to mind — Xbox Live’s prospects for pleasing its subscribers and limiting churn are strong.

  1. Evernote

Subscribers on Trim: 275

Though there aren’t quite as many Evernote users on Trim, relative to the other subscriptions we track, these users are certainly loyal. With major “content events” like National Novel Writing Month (NaNoWriMo) approaching fast, Evernote is poised to build on a strong foundation and demonstrate even more value to its users.

  1. Squarespace

Subscribers on Trim: 1,467

Filling the penultimate spot on our list is Squarespace, which powers websites and landing pages for all kinds of businesses. When you have a dead-simple product that fills a crucial need for a customer, it makes sense that subscribers will stick to the service in question.

  1. Dollar Shave Club

Last but not least, we’ve got Dollar Shave Club. In many ways the original “subscription” e-commerce business, DSC has maintained fierce loyalty from its customers even as they’ve undergone a recent $1B acquisition by Unilever. In the midst of these changes, we’re optimistic that they’ll maintain the offbeat, customer-oriented excellence that enabled their success.


A hearty congratulations to our winners! If you’ve got questions or comments about this ranking, feel free to post below, or hit us up on Twitter (@ask_trim). Again, if you want to track and cancel subscriptions or appeal silly fees, take a look at Trim here.

Why Overdraft Fees Exist, and How We’re Fighting Them


You’ve had a great month. You went to your friend’s wedding. You remembered your mom’s birthday and bought her flowers. You paid your rent. And after all that, you put away $100 in your savings account. You notice that your checking account is a little low — ok, really low. There’s $7 left. But you get paid in two days, so no problem. Phew.

Unbeknownst to you, Netflix automatically bills you $7.99 the next day.

Your bank signed you up for “overdraft protection.” That means your bank will float you the money to pay your Netflix bill – or any bill. But they charge you a $35 fee each time.

So you just paid a $35 fee for a $0.99 shortfall in your checking account.

This is the story for millions of Americans every year who pay more than $23 billion in overdraft fees, $35 at a time.


Overdraft fees made sense a long time ago. Let’s say you had to write a check for $600 in rent, but you didn’t have the money. Your friendly local banker would front you the $600 by not “bouncing” the check. In exchange, your banker would charge you a relatively small fee for the service.

Effectively, this is a payday loan from your bank. Banks knew they could provide an ultra-short-term credit option at relatively low risk because you kept all your money with them.

What’s changed? More payments are made electronically, through debit cards and automatic subscription billing. With more money flying around in increments of wildly variable size, it’s harder for folks to keep track of how much is left in their account. And this leads to more overdraft fees.

Why Now?

Overdraft fees are starting to attract attention from regulators like the CFPB, which has an ongoing investigation. Especially after the Wells Fargo scam — in which bank employees created millions of unauthorized, fee-charging accounts that their customers didn’t know about — consumers and regulators are increasingly aware that big retail banks might not be acting in the best interest of their customers.

We hope that the public, regulators like the CFPB, and Congress will take a good, hard look at overdraft fees and decide whether they’re fair or not. Regulators could demand that banks reform their marketing of overdraft programs, reduce the fee amount, and give a “grace period” for consumers who incur a fee.

What Trim Is Doing

Trim is an AI-powered financial assistant. We find ways to save you money and then actually do them for you – like cancelling your old subscriptions. Recently we’ve started contesting overdraft fees on behalf of our users.

If you’re a Trim user, and you get hit with an overdraft fee, we send you a text with an alert. You can reply to that text with the word “refund,” and we’ll send a template email automatically to your bank. This results in a refund of the fee about 1/3 of the time.

To date, we’ve sent 560 overdraft appeal emails, and seen refunds on 174 (31%). But this clearly isn’t enough. We need to get everyone involved in order to bring an end to unfair overdraft fees.


  • Banks make $23 billion from scammy overdraft fees per year. That’s more than the cost of subprime auto loans and nearly three times as much as payday loans.[1]
  • The typical overdraft fee is $35. According to Trim data, nearly one-third of fees are incurred by transactions that are less than the amount of the fee itself.
  • Trim is helping consumers to fight overdraft fees by automatically sending an appeal to your bank when you get hit with a fee. We’ve had a 30% success rate so far.

[1] http://www.cfsinnovation.com/CMSPages/GetFile.aspx?guid=ac5235a9-a42a-434c-a26a-66a1b148b712


Trim’s Two-Minute Guide to Handling Your Money

We at Trim think that your money is important, but that that you probably don’t want to worry about it all the time. Do the things below, and you’ll be on a relatively headache-less path to wealth.

  1. Open a Checking Account

Your checking account is your wallet, not your piggy bank. It exists to receive your paycheck and pay off your bills. We recommend Ally Financial Checking. It’s got a great website and a relatively high interest rate.

  1. Open a Savings Account

Your savings account is your short term piggy bank. It should have enough money for you to live off of for six months in case you lose your job. Again, Ally Financial is the way to go. Easy to use, and with a 1% APY, which is pretty good given how low interest rates are right now.

  1. Passively Invest

Forget beating the market. People on Wall Street try to do it, and generally they’re not very good at it. The Wall Street Journal reports that over the last ten years, between 71% and 93% of actively managed mutual funds have performed worse than the indices they compare their performance against.

Instead, make monthly contributions to the Vanguard Total Market Fund, the largest passively managed mutual fund in the world. It tracks the U.S. stock market, and has looked like this over the last ten years.


Screen Shot 2016-10-24 at 2.42.28 PM

And that’s mostly it. Of course, managing your money is more complicating that these three points, but if have a checking account, six months of money in your savings account, and regularly contribute to the Vanguard Total Market Fund, you’ll be in better shape than most Americans. Stay tuned for more details on passive investing and saving for retirement.

How to Get Rid of Overdraft Fees

Did you just get an overdraft fee?

Or have you had one in the past 30 days?

 Let’s get rid of it.

I’ll explain a few different strategies, in order of expected success.


  • Tweet at your bank.

Big banks have full-time employees who have one job: Twitter.

Those people are about to be your best friends.

Tweet at your bank, asking for help with an “unusual fee.”

They’ll tweet back at you and ask you to direct message (DM) them.

Remember, don’t include any confidential information like your account number.


  • Call your bank.

It’s a pain. But it works.

Call your bank and find something to read while you’re on hold.

Once you connect with a real person, be polite and ask if there’s anything they can do about the fee.

If you’d like to be bold, mention that you’re worried about the current regulatory environment for retail banking, and muse aloud on the effective APR of the overdraft fee you received.

If it doesn’t work the first time, try again.


  • Email your bank.

To be frank, emailing your bank has the lowest possibility of success.

That’s probably why it’s the easiest :)

Banks do their best to hide their email addresses.

If you do find an email address and get through to them, give enough information for them to get in touch with you. Again, don’t put confidential information in an email.

Usually your bank will call you to confirm your identity and discuss the details.

Be sure you don’t miss that call! Usually they won’t keep trying. After all, you’re trying to get your $35 back.



  • Exciting news: Trim will contest overdraft fees FOR you, 100% free.

If you’re interested, sign up at m.me/asktrim (Facebook Messenger) or asktrim.com.