GoChange – Keep You On Track or Creep You Out?

Have you heard about GoChange?  It’s an app that acts like a virtual financial assistant that texts you financial updates that will hopefully keep you on track with your personal finances.

I’ve been using it for several weeks now and I have good, bad and ugly to report.  The good is that some of us need to be forced to save and the Go Change app can do that.  Fortunately I am not currently that person, but I think this app could be very helpful.

It works by finding it here and then it evaluates your banking information for habits and using an algorithm to figure out when $5 here or there extra has been untapped and sticks that extra money into a savings hold (like Digit, if you’ve heard of that one already).  They hold those funds until you claim them.  Think of it as a way to sneekily trick yourself in not noticing when your saving money.  Kinda sweet.

I didn’t go for the savings feature, however there is still value to be had.  The notifications I got a lot out of were in the spending habits comparisons and when my banking balances were getting low.

I asked myself, “How are they making money?”  All the interest earned from that pool of money they auto-save for people, they keep as their own.  That doesn’t sound great, but to put it in perspective the money you or I would have earned from our few hundred dollars is minuscule, so no tears shed there.  The company has been doing this for a few years. In 2015 the parent company Dwolla, managed 650,000 clients and over $5,000,000 per day in deposits (https://files.consumerfinance.gov/f/201603_cfpb_consent-order-dwolla-inc.pdf).  Not their first rodeo.  Again, this is like Digit though GoChange is still free and Digit just started charging a $2.99 fee per month. 

Ok, now the ugly.  I did some research and found a consent order was issued March 2, 2016.  This was handed down from the United States of America, Consumer Financial Protection Bureau.  The filling was for “deceptive acts and practices relating to false representations regarding respondents data-security practices”.

GoChange asserted in its advertising from January 2011 to March 2014, that the transactions between merchants, friends, family and the consumer of the app were more safe than a credit card and that Dwolla’s data was secured using practices that exceeded the industries standards (https://gochange.co/privacy-policy/).  The US CFPA found these claims to be false.  (https://files.consumerfinance.gov/f/201603_cfpb_consent-order-dwolla-inc.pdf).

This is good news.  Right now, since they got their act together, it may be one of the safest ways to save.  Especially if the money in your hands has a way to slip away without conscious notice. 

My GoChange Conclusion