Wells Fargo Identity Theft Scandal: A Definite Game Changer

Wells Fargo Identity Theft Scandal: A Definite Game Changer

By Shehwar Ali

According to the L.A Times,the California Attorney General, Kamala Harris,  issued Wells Fargo a search warrant on Oct 5th , seeking documents associated with the creation of 2 million unauthorized bank accounts. The employees of Wells Fargo are suspected to have committed “Identity Theft” and used customer information to open bank accounts, credit cards and other products on their behalf without their customers knowledge.

How Did They Do It?

An affidavit was used to secure the warrant, and James Hirt, state investigator, thinks that to find and access customers’ information and to use them to open unauthorized accounts, Wells Fargo’s computer systems were illegally accessed by the workers. It has also been reported that customers’ signatures were replicated,  personal identification numbers were created, fake email addresses were generated and even money was transferred from their legitimate account to the unauthorized accounts to make it look real.

Wells Fargo’s reputation has downgraded from stable to negative and in the near future, according to a ratings agency, Wells Fargo has to face the potential consequences of investigations and so consequently, the long term effects of damage to the bank’s reputation. According to the bank’s quarterly earnings report last week, there’s a 9% decrease in the profit in community banking division and also the number of new checking accounts has dropped to 25%.

Who Was Targeted?

According to Hirt’s affidavit, a $10,000 line of credit account was opened using a customer’s account. This customer had to re-open his account half a dozen times in four years. Another case includes monthly transfers of $50-$150 from personal accounts to unauthorized savings account. The bank fired 5,300 employees involved in the scandal along with an area manager who was responsible.

It was noted that to bolster the quotas, bankers targeted vulnerable clients, including Spanish-speaking immigrants and Mexican nationals. The bank has apologized for breaking the trust of customers, and because of the scandal, the bank’s reputation is expected to undermine even further and damage is beyond the bank’s customer division.

The fact is we trust banks with our sensitive personal information and also our money. Imagine someone going through all your stuff in order to steal your personal information. But the worst of it all is that customers put their faith in such reputable financial organizations and its people just to see them take away that faith. And it is said that the scope of this particular scandal is shocking and other banks are making money out of the Wells Fargo financial crisis. Last but not the least, Wells Fargo has given the statement that they take responsibility because they have made a mistake and are open about it and will take all the necessary actions to fix it.

Image courtesy of pixabay.com

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