As you probably know by now, Wells Fargo Bank has been hit with the largest fine ever by the Consumer Financial Protection Bureau (CFPB) in the amount of $185 million in fines along with a $5 million refund to customers. There were over 5,000 Wells Fargo employees fired for establishing over 2 million phony accounts that customers did not realize were being created in their names. This has been going on since 2011 according to Richard Cordray, director of the CFPB, “Wells Fargo employees secretly opened unauthorized accounts ticket sales targets and receive bonuses”.
Employees would move funds from one account, create another customer account without the approval of that customer into newly created accounts. Customers were then being charged for insufficient funds or overdraft fees because there was not enough money in the original accounts. The employees of Wells Fargo further submitted applications for over one half million credit card accounts without the customer’s knowledge or consent.
I do not want to get into the nuances of what happened or how it happened, but according to Jim Zarroli of National Public Radio (NPR) a further developing story states that although no one knows for sure, it’s almost a lock that these fictitious accounts have had a big impact on customer’s credit scores. That is where I become very interested, as I work with people with credit issues on their credit reports.
Every time a customer had a credit card issued to them, it is reported on the person’s credit report. And that’s just the beginning. Whether or not the customer received the credit cards is unstated. But if these accounts had an annual fee, the customer would not pay the annual fee. This develops into late payments appearing on their credit report and that has the potential to be very damaging. Not only that, but someone with many overdraft fees might be denied checking accounts when attempting to open checking accounts at other banks.
As I’ve spoken of many times, credit reports are read by more than people determining your credit worthiness. They are checked by potential landlords, employers, insurance companies and even cell phone companies.
As sad as it is, we, the American consumer, must keep track of what is on our credit reports. It has been estimated that close to 80% of all credit reports have errors on them. Wells Fargo Bank and its leadership has created and let fester a credit situation far beyond what is currently known.
Please take a look at your credit report through www.annualcreditreport.com to verify the information on your report is correct. If it is not, and you need help, please let me know.
“Credit so Clean, people want to steal it”