Recently, one of the nation’s leading banks, Wells Fargo, was fined $185 million by federal regulators for opening fraudulent bank accounts, credit and debit cards in their customer’s name without their permission. At least 5,300 Wells Fargo participated in a scheme that involved enrolling their customers in banking services using fake personal identification numbers and phony email addresses. The employees would then transfer funds from the legitimate bank accounts in order to temporarily fund the new, unauthorized accounts. This siphoning of funds would registered as an account imbalance where Wells Fargo would then charge customers for insufficient funds or apply overdraft fees. In a statement issued by the Consumer Financial Protection Bureau, Wells Fargo employees “chased compensation incentives” by “secretly opening unauthorized accounts to hit sales targets and receive bonuses”. In addition to the multi-million dollar fine, Wells Fargo has also been order to pay restitution to its customers in the form of refunds to the tune of $2.5 million.
While this is troubling news for Wells Fargo customers, it raises grave concerns for the millions of other consumers at leading commercial banks. Consumers are now inquiring about ways to protect themselves against what can only be deemed as internal consumer fraud. Since these were internal actions conducted by bank employees on phony accounts, it’s unlikely that typical protective measures, such as credit card fraud alerts, would have caught such fraudulent activity. Thus, the only “alert” Wells Fargo consumers had to warn them of the fraud in this case were questionable transactions on their monthly bank and/or credit card statements. Unfortunately, by the time statements reached customer mailboxes, Wells Fargo had already bilked them out of millions!
So, what should consumers take-away from this unfortunate situation? As mentioned in an earlier blog post on how to Protect Yourself Against ID Theft and Online Scams, you should always review your monthly bank and credit card statements and question any suspicious activity you may find, i.e., an unusual purchase at a retail store where you seldom shop, an out-of-state purchase or a charged item out of your normal price range. Such suspicious financial transactions or rapid depletion of your bank account could have acted as red flags and signaled Wells Fargo customers of unauthorized financial activity long before things got too far out of hand. Of course, one other thing Wells Fargo customers could have looked for were questionable or excessive overdraft fees which were the primary signs they had to warn them something was amiss with their bank accounts.
For more tips on how you can protect yourself from ID theft and make your Internet browsing experience virtually scam proof, download a copy of my latest eBook, “Home Network Security and Protecting Against Internet Scams”.
Zebert L. Brown is the author of Break the Debt Cycle in 3 Simple Steps and a 16 year Navy veteran with specialties in administrative management, career development and public relations. Follow him on Facebook and Twitter.