Wells Fargo employees have created more than two million undesired bank and credit card accounts in what appears to be a widespread banking practice in the United States and abroad. The bank has already been fined $185 million over the opening of phony accounts and has paid $2.6 million in refunds to customers impacted by the bank’s unacceptable practices. Anyone would agree that opening a bank or credit card account without explicit approval by the account holder is misconduct by any rate.
A letter by senators Susan Collins and Claire McCaskill, addressed to Consumer Financial Protection Bureau director Richard Cordray, is asking questions that are even more troublesome.
“How did the Bureau learn of fraud in this case, and has it investigated whether employees at other financial institutions have participated is similar fraudulent activities?” the letter asks.
This is a reasonable question provided that a database by the Consumer Financial Protection Bureau contains more than 30,000 complaints on the issue of “account opening, closing or management.”
Marketwatch.com have analyzed the complaints and have found thousands of complaints concerning “account opening, closing or management” against major financial and banking institutions like Bank of America, Wells Fargo, J.P. Morgan Chase, and Citibank.
Not all of these cases represent fraud or misconduct by the financial institutions nor one should expect the banks concerned to comment publicly on these complaints.
What is alarming, however, is the fact that these complaints exist and are in the range of tens of thousands. Added that the person in charge of the Wells Fargo unit whose employees opened over 2 million unauthorized accounts, Carrie Tolstedt, left the bank with honors in July, one would ask further questions whether the above practices have been adopted intentionally.
One thing is abundantly clear. You should check all your bank statements and notifications regardless of the banking institution you have trusted to manage your money. This is a best customer practice although the senators’ letter is raising further questions, asking:
“How will the Bureau ensure that the victims without Internet access are notified of owed restitution payments? … In what way will Wells Fargo ensure that notices to customers about newly opened accounts reach individuals who lack Internet access?”
These questions could be asked to literary any financial institution because Wells Fargo is barely alone in conducting practices that betray customer trust if we dig deeper into the complaints database of the Consumer Financial Protection Bureau.