Wells Fargo Fake Accounts Plague Consumers

In 2016, Wells Fargo made headlines when it paid $110 million to settle a class action lawsuit and another $185 million in fines relating to allegations that the bank had created as many as 2 million accounts for customers without getting their permission to do so. Then, in December 2022, it paid a whopping $3.7 billion to settle claims involving 16 million accounts. Now Wells Fargo is in the news again, and it’s once more about fake accounts. But this time, Wells Fargo may be one of the victims of the wrongdoing. Or not….

Consumers Learning of Fake Accounts

According to NBC News, since 2022, a few dozen consumers have filed complaints with the Consumer Financial Protection Bureau that they’ve learned they have unapproved accounts with Wells Fargo. However, unlike those caught up in the earlier account scandal, these consumers weren’t already customers with Wells Fargo. Instead, they had no prior connection with the bank.

Some learned of the fake accounts by accident. Still others received notices from Wells Fargo. And some of these accounts had several thousand dollars flowing in and out of them—with some bounced transactions, too.

Synthetic Identity Theft

Experts reviewing the consumers’ complaints informed NBC News that the likely explanation is that the consumers are victims of “synthetic identity theft.” Unlike traditional identity theft, when someone poses as another person by using their information, with synthetic identity theft, a scammer cobbles together some people’s real information with fake data. While it can be a complicated con (that takes years in the making), once the fake identity is created, it’s easier for the scammer to use because they can continue to change the contact information and other data to best suit their scam. At the same time, the mix of fake and real data means it’s easier for synthetic identities to be used without detection.

Is Wells Fargo Responsible?

At first glance, it would seem that Wells Fargo is, along with the consumers themselves, a victim. However, one of the impacted consumers is suing Wells Fargo and Early Warning, a company co-owned by Wells Fargo and other banks that runs the Zelle payment service and collects data for identification services. In the lawsuit, the consumer alleges that Wells Fargo and Early Warning stole his data and verified the false transactions as his—therefore damaging his credit.

There’s no way to know what the outcome of the lawsuit will be, but the incident should remind all consumers of certain key facts:

  • It’s important to regularly check your credit report for any false accounts or other errors.
  • If you learn of any fake accounts, put an alert on your credit reports as soon as possible.
  • Be careful allowing any institution access to your banking information because it’s possible that they may circulate it to other entities without your knowledge.
  • Financial entities should be vigilant about the security of their records; if they are aware of errors, they should notify you and correct them. If they fail to do so, they may be liable for damages.

That’s why, if you have had any issues with identity theft or other issues with incorrect information on your credit report, contact an attorney as soon as possible. The Credit Report Law Group can help you correct your credit record and obtain compensation for any damages you have sustained.