By Lisa Gilbert and Michael Tanglis
Don’t hold your breath waiting for Wells Fargo to do the right thing.
John Stumpf, Wells Fargo’s recently retired CEO, admitted in a congressional hearing that he first learned about his own bank’s problem with millions of fraudulent accounts in 2013. After three years of evasions and excuses, this week he resigned.
If the bank’s deflection of blame onto more than 5,000 low-level employees is any indication, customers waiting for Wells Fargo to take responsibility for its mismanagement, pay back customers and repair damaged credit scores could be waiting a very long time. So here are some steps you can take to see if you’ve been a victim of Wells Fargo’s fraud and what to do if you suspect foul play.
If you use Wells Fargo’s online banking system, sign in and look for accounts or transactions you do not recognize. If you do not use their online platform, signing up is a good way to monitor your banking activity. If you see something that looks suspicious, get in touch with the bank. You can either contact customer service, visit a local branch to speak with a representative or call their dedicated hotline set up in the wake of the scandal.
If you cannot achieve a satisfactory resolution, one option is to file a complaint with the U.S. Consumer Financial Protection Bureau (CFPB). If you suspect you have been the victim of fraud or a fake account was opened in your name, the CFPB wants to hear about it.
Another way to identify malfeasance is to obtain a credit report. If your credit score took a hit for unknown reasons and you are a Wells Fargo customer, it’s worth investigating the possibility that it might be related to an account that was opened in your name without your permission. If that appears to be the case, you should contact your local law enforcement and report it to the Federal Trade Commission.
A final option is to close your Wells Fargo accounts. The widespread fraud was the result of a 16-year cross-selling frenzy in which bank management put enormous pressure on workers to open as many new accounts as possible, with a goal of eight per household. Since turnabout is fair play, it may be that the best response to the Wells Fargo scandal is for consumers to leave them with none at all.
If you close your current accounts, think carefully about where you want to open new ones. It is likely that community banks and credit unions may be safer and more trustworthy alternatives than another megabank because they are smaller and therefore closer and more responsive to their customer base.
This scandal happened in no small part because megabanks are simply too big to manage. In two congressional hearings, Stumpf demonstrated as much when he repeatedly pleaded ignorant in response to even the most elementary questions about his bank’s operations and sales practices.
Megabanks tend to copy each other’s “successful” strategies and management practices, so it’s entirely possible that other large banks may have indulged in a similar cross-selling frenzy with similarly fraudulent results.
In fact, The Wall Street Journal recently reported that Bank of America COO, Thomas Montag, attended a banking function wearing a hat and T-shirt with the words “Cross Sell“ on them – the practice at the heart of the misconduct that led to the government imposing a $185 million fine on Wells Fargo.
We don’t know what misdeeds regulators will uncover at other megabanks in the months and years ahead, but the 2008 financial crash demonstrated that these banks put profits ahead of what’s best for their customers and the country.
If there’s one lesson we can take away from the Wells Fargo scandal, it’s that if banks are too big to fail, too big to jail and too big to manage, they’re also probably too big to trust.