Feds Investigating Wells Fargo Sudden Account Closures

Last year, federal regulators fined Wells Fargo $185 million for its fake account fiasco in which employees were found to have opened more than two million accounts without customers’ authorization. Now, the bank says it’s under investigation for wrongly closing some accounts. 

Wells Fargo informed investors in an Aug. 4 Securities and Exchange Commission filing [PDF] that the Consumer Financial Protection Bureau has opened an investigation into whether the bank harmed consumers by freezing or closing accounts.

The company notes in the filing that it took action on the accounts after detecting suspected fraudulent activity by third parties or account holders.

“The Consumer Financial Protection Bureau has commenced an investigation into whether customers were unduly harmed by the Company’s procedures regarding the freezing (and, in many cases, closing) of consumer deposit accounts after the Company detected suspected fraudulent activity (by third parties or account holders) that affected those accounts,” the filing reads.

A rep for Wells Fargo tells Reuters that the company continues to work with the regulator.

“As always, our goal is to protect our customers and the bank from fraud, and we want to do so in ways that minimize the risk and impact on our customers,” the rep said.

The Complaints

A review of the CFPB’s consumer complaint database shows several customers raising concerns about the way in which the bank closed their accounts.

In one case, a customer says that after 23 years banking with the company he recevied a letter advising him that after reviewing their relationship, the bank had decided to close the account.

“This unilateral and arbitrary decision has harmed me and turned my life upside down,” the man wrote. “I’ve had to stop automatic payments, deposits, etc.”

Another Wells Fargo customer tells the CFPB that the bank closed their account without warning or providing an explanation.

To make matters worse, the customer says that Wells Fargo did not return the $500 left in the count promptly. Instead, the funds were frozen for nearly two weeks.

In March, a Florida customer reported that Wells Fargo had closed his account — one that he was persuaded to open by a teller and never used — after someone had fraudulently used the account.

The customer said he only learned of the issue when he went to deposit a check in the account. A manager at the local branch said the account was closed because it had been overdrawn and that the man would receive a letter in the mail.

When the letter arrived, it showed that someone had cashed checks at the bank using a similar name to this customers, but instead of being from Florida, the check writer was from Alabama.

“Wells Fargo has completely stone-walled me, my name has been added to the fraud warning site, I can’t open any bank accounts, it has damaged my reputation and has caused me much grief,” the customer wrote.

 

by Ashlee Kieler via Consumerist