Wells Fargo Under Investigation for Fake Accounts and ID Theft

Banking 0 21

California’s Department of Justice is formerly investigating Wells Fargo & Co. for the alleged creation of millions of fake and unauthorized accounts including multiple cases of identity fraud. Attorney General, Kamala Harris joined the multi-agency investigation after warrants and other documents were served on the 5th of last month. Officials are currently working through a trove of information including the names of who the accounts were opened for, fees, who created their accounts, line managers, internal correspondence and so on.

While Harris is unable to comment on the ongoing case, Wells Fargo’s Mark Folk has stressed that the bank is open and cooperative with investigations. It is thought that these allegations go back as far as 2011. Papers uncovered by the LA Times suggest that the bank is accused of breaking 2 sections of the California penal code. The first breach is the outlawing of select forms of impersonation. In addition, they are accused of breaching the law against unwarranted use of a customer or client’s personal file. Any employees found guilty of breaching these laws can face up to 1 year in prison.

Currently, it is uncertain whether more laws have been broken, though there are suggestions that the violations may go beyond the state of California to other states as well. Furthermore, it is not yet known whether individual employees will be prosecuted or whether prosecutions will focus on mid-level or senior management, or the company as a whole. However, we do know that federal bank regulators in conjunction with the Attorney’s Office for the city of Los Angeles did agree a settlement with Wells Fargo over the fabrication of unauthorized accounts worth $185 million.

As well as this financial settlement, the controversy has already claimed one person. Wells Fargo CEO John Stumpf took early retirement after a much criticised performance in front of Congress. Questions are also being asked of retired bank executive Carrie Tolstedt.

While the investigation looks at various activities the press, regulators and investigators seem to be paying precious little attention to the plight of the real victims – those whose identities were stolen. Signatures were forged, money was transferred from legitimate customer accounts to the new, unauthorized ones to create a sense of realness and this has impacted many of the victims. Many only found out when they were sent notices for outstanding fees owed on accounts and policies they had no knowledge of. Such actions cause a high amount of stress in individuals, couples and families with untold consequences to the financial wellbeing, mental wellbeing, and physical wellbeing of these victims.

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