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from the how-far-did-Wells-Fargo-go-to-far? dept.
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: 2) by AthanasiusKircher on Tuesday September 27 2016, @03:10PM
Second, credit scores. As a European, I find the American credit-reporting process absolutely shocking. You have a private business relationship with your bank. They should have no right to hand private customer information to a third party.
Where in Europe? I admittedly don't know as much about European credit markets as American, but most European countries do have methods to share negative credit information among banks, particularly for loans. They may not always be as detailed as American credit reports (particularly in terms of reporting positive events, like consistent responsible credit usage and payments), but if you do bad things with credit in most European countries, it will follow you just as it does in the U.S.
Personally, I do find the U.S. system invasive too, particularly in terms of the reporting of exact amounts for loans, credit limits, credit card statements/payments, etc. The credit scoring system could basically work just as well if banks and lenders reported general range information rather than exact amounts. Credit scores could still be calculated and a prospective lender could still tell whether you have a regular history of "pays as agreed," or whether you have $500 of credit and are maxed out vs. $100,000 of credit and basically no debt.
I also think credit reporting agencies should be required by law to offer "free credit monitoring" and let you view your report at any time. Or, if they refuse, they should be required by law to send you written notification whenever a significant new item is added to your report, e.g., a new account opened, a new address reported, any "hard" inquiries which show up on your report, any new negative items. It's the minimum necessary to prevent identity theft, account misuse, and the very frequent errors that appear on reports. Credit report errors really affect people's lives in very significant ways -- even if you aren't outright denied a loan, you might end up paying many thousands more in interest if you don't qualify for a better rate or whatever. The law allowing you to view your reports once per year is a major step ahead, but it's really not enough for something that influences people's lives and financial well-being on such a significant level.