Have you ever wondered what would stop a bank employee from stealing your money? The problem is not about stealing cash from a safe, but rather it's about using customer's personal information in order to perpetrate fraud. This is exactly what appears to have happened at one of the nation's largest banks, Wells Fargo.
Fake Accounts and Phantom Fees
The Consumer Financial Protection Bureau (CFPB) recently issued a $100 million dollar fine against Wells Fargo for its employees who secretly opened about 1.5 million bank accounts and around 565,000 credit card accounts that were unauthorized. In addition, it will also have to pay $35 million in penalties to the Office of the Comptroller of the Currency, and another $50 million to the City and County of Los Angeles.
According to the CFPB, Wells Fargo employees were given incentives to open accounts, and were able to earn bonuses for doing so without the consent of its customers. Employees opened accounts and transferred funds, applied for credit and debit card accounts, and even created phony customer email addresses, all without authorization. And in many cases, customers noticed being charged fees for services they didn't request, or receiving credit cards they had not applied for.
In addition to the $185 million in total fines, Wells Fargo has agreed to pay $2.5 million in refunds to customers for all monthly maintenance fees, non sufficient fund fees, overdraft charges, and other fees they paid because of the creation of the unauthorized accounts. It also agreed to reform its sales practices ensuring that this doesn't happen again. Finally, it's been reported that Wells Fargo has fired at least 5,300 of its employees who have been implicated in this type of fraud, roughly 2% of its 265,000 of its workforce.
What You Can Do
If you bank with Wells Fargo, and were the victim of this type of fraud, you should expect to receive a refund of any fees you may have incurred, a process that has already been underway for several years. But more importantly, everyone should recognize that this type of fraud could potentially happen at any bank or credit union. And while most consumers know to be extremely careful not to disclose any personal information unnecessarily, there is little they can do to avoid disclosing personal information to bank employees.
The most important thing that you should do is to regularly check your credit report. You can obtain a free credit report from the three major consumer credit bureaus each year at AnnualCreditReport.com. Look through each item on your credit reports to ensure its accuracy, and pay special attention to any new accounts that might have opened. If you have open accounts that you are not familiar with, contact the institution to find out when they were opened, and if you have incurred any fees.
There are many advantages to our modern banking system, but it is not without its vulnerabilities. By taking a few minutes to review your credit reports each year, you can help prevent your personal information from being misused.