Troubles Continue to Mount for Wells Fargo & Co.Print Article
- Posted on: Aug 30 2017
In July, this Blog wrote about the settlement in connection with Wells Fargo & Co.’s phony accounts scandal that will require the bank to pay millions of dollars to aggrieved customers. Now, Wells Fargo has disclosed in a regulatory filing that the Consumer Finance Protection Bureau (“CFPB”) is investigating whether the bank incorrectly closed real accounts and left customers without access to their funds.
CFPB Probes Wells Fargo Account Closures
The CFPB probe was commenced after the consumer watchdog received numerous complaints from Wells Fargo customers who suffered financial hardship after the bank inexplicably froze or closed their accounts. In particular, some of the complaints raised the possibility that fraudulent deposits of unknown origin were made. Additionally, customers who said they were victims of identity theft claimed that Wells Fargo closed their accounts and refused to reopen them or open new ones.
The complaints noted that there was confusion over why the accounts were frozen or closed. Customers were not only unable to access their money, they did not receive assistance from the bank’s customer service representatives. Although the CFPB does not reveal details of consumer complaints, it does not appear that similar regulatory probes at other money center banks are underway. A spokesman for Wells Fargo said that the company is cooperating with the regulator and that its goal is to protect customers and the bank from fraud while minimizing the risk and impact on customers.
Unlike the the phony accounts scandal that appeared to be an effort to drive revenue, some observers believe this matter may have arisen from an abundance of caution to protect customers from suspicious activity. Nonetheless, the probe adds to the bank’s woes.
Since Wells Fargo settled with the customers who were swept up in the phony accounts fiasco, the bank has also acknowledged that customers were charged for insurance they did not request and required others to pay unnecessary mortgage fees. The question remains as to whether Wells Fargo was overzealous in closing the accounts to prevent fraud or whether this is part of a larger pattern of its mistreatment of customers.