Wells Fargo: Crisis of ConfidenceSeptember 29, 2016
The Wells Fargo bank investigation has been all over the news. The government’s Consumer Financial Protection Bureau has fined the bank for setting up around 1.5 million unauthorized bank accounts, taking out 565,000 credit cards in its customers’ names, and charging customers a variety of fees on the unauthorized accounts. The CEO of Wells Fargo has apologized before Congress, and the bank has fired over 5,000 employees. But if you’re a customer, you’re probably wondering, “What about me? How might this affect me, and am I a victim of identity theft?” Like you, we can only go by what’s been reported in the news, but here are our impressions of the situation and what we can all learn from it.
The employees who were setting up these accounts to meet internal quotas were certainly using customers’ personal information without their permission. The first class action lawsuit has been filed against Wells Fargo, and one of the allegations in that suit is that the bank violated customer privacy. That said, the information was used within the bank and within normal bank processes, not stolen and sold on the black market, so you would not expect to see identity problems beyond what has already been reported. According to news reports, bank officials say they have refunded all the fraudulent fees to customers— about $2.6 million in total—but they encourage any customers who think they might have been affected to contact them.
And therein lies the lesson of this news story: You have to be vigilant at all times because identity problems can come from anywhere. The issue at Wells Fargo was first discovered by vigilant customers, people who reviewed their statements carefully and reported suspicious fees on accounts and cards they never requested. It is likely that the opening of the accounts would have showed up on customer credit reports, so that would have been another way to spot problems. (At least one customer sued Wells Fargo last year after his credit score dropped when unpaid fees on the unauthorized accounts were sent to a collection agency.)
The Wells Fargo situation is worrisome, but the scope of the identity damage is very limited compared to criminal identity theft where someone might empty your bank accounts, take out loans, rent property, or even commit crimes in your name. If you’re a Wells Fargo customer, it’s not too late to review your accounts and make sure that any unauthorized accounts and cards are closed and any fees on them are refunded. But for all of us, the lesson here is to be on the alert. Check your financial statements, check your credit reports regularly, and if anything looks fishy, report it right away. Identity theft can happen anytime, anywhere, and your best defense is you.