Wells Fargo previously admitted that employees opened around 2.1 million unauthorized bank accounts in customers' names. Now that number could rise to 3.5 million:
Nearly a year after Wells Fargo's fraudulent account scandal burst into public view, the bank said it had turned up more than a million additional accounts that customers may not have authorized.
The news set off a fresh wave of criticism from those frustrated by the bank's slow pace in coming clean about its misdeeds. "Every time we get one of these announcements, the pressure rises," said Nancy Bush, a banking industry analyst who runs NAB Research. "How many customers, and how many employees within Wells Fargo, are coming to the conclusion, 'I don't need to be associated with this'?"
The findings brought the number of potentially unauthorized accounts to 3.5 million — a nearly 70 percent increase over the bank's initial estimate.
Wells Fargo agreed last September to pay $185 million to settle three government lawsuits over the bank's creation of sham accounts. Thousands of employees, trying to meet aggressive sales goals, had created accounts in customers' names without their knowledge. Workers who met the bank's sales targets received bonuses — and those who did not risked losing their jobs. At the time, Wells Fargo said that 2.1 million suspect accounts had been opened from 2011 to mid-2015. But it also acknowledged at the time that the problems may have begun earlier, and said it would expand its review to include accounts opened from 2009 to 2016.
Also at NPR, Reuters, and Bloomberg.
Statement from Wells Fargo.
Previously: Wells Fargo Fined Over Unauthorized Accounts
Wells Fargo Likely Hurt Customers' Credit Scores; Labor Department Launches Review
Related Stories
5,300 Wells Fargo Employees Fired Over 2 Million Phony Accounts
You should be able to trust your bank, right? According to CNN Money, Wells Fargo employees attempted to meet sales goals and boost their income by creating unauthorized accounts and applying for credit cards on behalf of their customers — without their authorization:
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.
[...] Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.
The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.
The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent, regulators say. The CFPB described this practice as "widespread." Customers were being charged for insufficient funds or overdraft fees -- because there wasn't enough money in their original accounts.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers' knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.
The CFPB said Wells Fargo will pay "full restitutions to all victims."
[Continues...]
NPR reports:
This month federal regulators fined Wells Fargo $185 million for opening checking and credit card accounts on behalf of customers who had no idea that was happening. The bank has promised to try to make restitution. [...] In some cases, Wells Fargo employees would transfer funds into the new accounts from one of the customer's existing accounts. That could result in late fees or fines for insufficient funds. Ira Rheingold, executive director of the National Association of Consumer Advocates, says that would have had a direct impact on someone's credit score. "You may not have qualified for a mortgage or you might have been dinged by getting charged a little higher interest rate because of what was reported wrongly on your credit report," he says. But the potential impact goes beyond the customer's finances. These days, credit scores are routinely checked by potential landlords, by employers — even by cellphone companies. Wu says someone who has racked up too many overdraft fees because of unauthorized accounts may have trouble getting another checking account.
The U.S. Labor Department will launch a review of complaints related to Wells Fargo:
U.S. Labor Department Secretary Thomas Perez on Monday pledged to conduct a "top-to-bottom" review of all cases, complaints and other alleged violations that the department has received concerning Wells Fargo in recent years. Perez's announcement, outlined in a Sept. 26 letter to Senator Elizabeth Warren of Massachusetts, comes after Warren and other Democrats asked the Labor Department last week to launch a probe into possible wage and working-hour law violations involving Wells Fargo tellers and sales representatives who may have stayed late to meet sales quotas.
Previously:
Wells Fargo Fined Over Unauthorized Accounts.
(Score: -1, Troll) by Anonymous Coward on Friday September 01 2017, @05:46AM
If everyone got paid a basic income, nobody would have to worry about losing their job, and job performance enhancing fraud would disappear.
(Score: 2) by mendax on Friday September 01 2017, @06:02AM (1 child)
It was in 2005 that I left Wells Fargo as a customer for all my accounts when I refinanced my mortgage with the local credit union. I got tired of being nickled and dimed by them by fees. I have never regretted the decision and I now realize that my dislike of Wells Fargo was perhaps based upon something based more on intuition of just how nasty an organization it really is.
It's really quite a simple choice: Life, Death, or Los Angeles.
(Score: 4, Informative) by iwoloschin on Friday September 01 2017, @11:06AM
I've tried to get them to sell my mortgage (they bought it from a local mortgage originator) for years, but they refuse to do so, even though at least once a quarter I send them a request to request my escrow account be cancelled since they cannot seem to manage it properly themselves. They've even admitted they don't even bother looking at the real estate tax bills, they just guestimate it out and fix it later. Supposedly they cannot cancel it because it's a VA loan, even though the VA has no restrictions on escrow accounts.
Unfortunately, it's a 3.25% 30 year loan, so refinancing is likely only going to cost me more money, and as long as I stay on top of the account it's easy to catch stupid problems. It's just frustrating that I'm doing their job and paying them for the privilege.
(Score: 2) by frojack on Friday September 01 2017, @07:23AM (7 children)
They opened these accounts, and put who's money in them?
Certainly not the money that belonged to the customer, because they would have missed it.
Certainly not loans, because someone would eventually demand that the customer pay back the loans.
So where did the money come from? Or were these bogus accounts simply zero balance accounts that did nothing, cost nothing but simply earned the employee a raise?
No, you are mistaken. I've always had this sig.
(Score: 2) by looorg on Friday September 01 2017, @07:29AM (5 children)
Could you even open an account with a zero balance?
(Score: 3, Interesting) by DeathMonkey on Friday September 01 2017, @08:46AM (4 children)
Could you even open an account with a zero balance?
Yes.
This is my understanding of the scam: They open a (zero-balance) checking account in the victim's name. Then, they open a credit card account based on the checking account. They get a bonus for opening credit card accounts...
(Score: 0) by Anonymous Coward on Friday September 01 2017, @10:52AM (2 children)
Any particular reason that the name on the new account and credit card have to be an existing customer? Probably makes it easier because the bank already has the necessary personal details. But what's stopping the use of any name (real or fictional)?
I've never been a W-F customer, but maybe I should look to see if they set up an account in my name??
(Score: 3, Funny) by leftover on Friday September 01 2017, @12:35PM (1 child)
Interesting "Payback is a MF" scheme: Everybody start calling them or showing up at branches to see whether there is an account in your name. Duplicate names are common enough in the general population that a goodly percentage of inquiries would produce false positives that need more work to chase down, need management's attention, etc.
Bent, folded, spindled, and mutilated.
(Score: 1) by toddestan on Friday September 01 2017, @11:39PM
That may not be as much work as it could be if the (real) accounts are tied to a SSN. Though that does raise the question about the fake accounts, if they needed to be tied to a SSN, then what was used?
(Score: 3, Insightful) by nobu_the_bard on Friday September 01 2017, @02:00PM
What they kept doing to me, whenever I'd make any changes to my account for years, and I had to keep dealing with:
- Create new savings account, transfer funds from old one, update my scheduled transfers to point at the new one, schedule to close old one then cancel the close order later so I had a zero-balance savings account sitting around. I assume closing accounts counted against them, so they'd always avoid my requests to do so. They did this at least twice.
- Try to open new lines of credit or loans with zero balances? I never let them get away with this so I don't know how it works exactly, but they'd try to get me to sign things to enable it and I just would refuse. Eventually I did get a decent credit account out of it with very low interest by paying close attention to the offers and taking a good one that finally appeared.
- Re-enable "overdraft protection" silently, without informing me or having it appear in any logs, every time I made ANY change. It took me awhile to notice this had been happening since it doesn't come up much. Overdraft protection is a total scam, I consider it far more blatant than all the rest.
I assumed it was just the local bank manager was really pushy but it seems these sorts of behaviors are systemic. Unfortunately they've put most of the other banks in the region out of business. Those that remain are too far away or have hours I can't work with. I think this situation is contributing strongly to a major credit union on the upswing that is starting to install ATMs here and there. I have some loans with them; I might start using them regularly if they get some ATMs closer to me.
(Score: 1) by fustakrakich on Friday September 01 2017, @03:46PM
So where did the money come from?
Gee, I thought it was obvious [independent.co.uk]...
Too big to fail, too big to punish. Life is good...
La politica e i criminali sono la stessa cosa..
(Score: 3, Insightful) by urza9814 on Friday September 01 2017, @01:46PM (1 child)
Really wish I could boycott these fuckers...unfortunately, they've got my 401(k), so there's not a damn thing I can do about that...is there?
(Score: 0) by Anonymous Coward on Friday September 01 2017, @04:34PM
If Wells Fargo is the company that your employer has chosen to use to handle your 401-k, you are stuck with them.
Otherwise (if your 401-k is from a former employer), you can roll over that old 401-k into an IRA at any investment company.
I strongly recommend Vanguard. Cheap and simple plans. Call them and they will talk you thru the process.
(Score: 1, Interesting) by Anonymous Coward on Friday September 01 2017, @01:56PM (1 child)
A while back they started charging me $5 per account per month. I had like 7 accounts with them, so this was unacceptable, the money was safer in a mattress.
Thankfully, a few years before they had denied me a car loan (only $6k? can't be bothered), so I had found a Credit Union for the loan, we ended up moving all the accounts pretty quickly.
They did sit me down for an "exit interview", so I told them exactly why I was leaving.
(Score: 2) by SanityCheck on Friday September 01 2017, @05:18PM
I can imagine that conversation:
"Why? BECAUSE YOU ARE SHIT, THAT'S WHY!"
(Score: 2) by cmdrklarg on Friday September 01 2017, @09:37PM
I bank with Wells Fargo, and have had zero problems with them. Considered moving my accounts, but my company 401k is through them, so I'd still need to deal with them anyways. Since I've had no issues I carried on with life. YMMV
The world is full of kings and queens who blind your eyes and steal your dreams.