Wells Fargo is the largest mortgage originator in the US and odds are good that you or someone you know either has a bank account or mortgage with Wells. Recently, it was uncovered that the bank was opening unauthorized bank accounts and credit cards for customers to help associates meet their sales goals at the expense of their customers.
Those who were affected by these fraudulent accounts have potentially incurred large fees, overdraft fees, interest, and even worse damaged credit scores.
Wells Fargo will be refunding customers their money, however, those who had their credit scores impacted will likely suffer from the bank’s deceitful practice and could prevent some from getting a mortgage or other loan products or pay higher interest rates thanks to the damages credit scores.
If you were affected by this unfortunate incident, here are some tips on how to get your credit score back on track and help to prevent this sort of thing in the future:
- Cancel any unauthorized account. Close any accounts the bank opened for you that was not authorized. Keep records of transactions and of your closing the account.
- Check your credit score. Notify the credit bureaus if you notice that any of these unauthorized accounts being reported on your credit report. They each have an appeals process to note errors or fraud on your history. Letting them know an issue exists is your best bet to help to improve your damaged score. This won’t necessarily fix it now, however it will help to have that on record and could improve within a few months. You can get your free credit report at annualcreditreport.com. (Do not pay for a credit report from any other service. Credit reports are provided free once a year.)
- Check your bank statements every month. It’s important to be aware of what is happening to your financial life. If you see something you don’t understand, ask your financial institution.
- Don’t be afraid to get a second opinion. Any questions you ask should be answered fully and in a manner in which you understand. If your financial institution can’t answer your questions sufficiently, get a second opinion. Unfortunately, Wells Fargo’s employees lied and bullied some customers. If something doesn’t add up, perhaps something is actually wrong. Seek out answers from other financial institutions, CPAs, loan officers, or financial advisers.
- Work to pay down non-mortgage debt. This is a long-term strategy to help to improve your credit score. Unsecured debts like credit card balances impact your score negatively and indicate the borrower could be risky to loan to since the borrower can’t sell an underlying asset to pay off the credit card debt (like you can sell a home to pay off a mortgage).
- Consider changing banks. I have used large banks in the past and haven’t had any major issues to complain about, however, I find that local banks fit my needs much better. There are a lot of high quality St. Louis banks to choose from. Local banks offer more benefits to using them (like high rates of interest, no fee accounts, etc.) and I know everyone in my bank by name and they know me by name. I can drop in and ask questions without feeling like an inconvenience. There is definitely something to be said for that level of service.
- Call the CFPB if you’re still having issues. You can reach them at (855) 411-2372 or you can complete a complaint form online.
According to the CFPB (Consumer Financial Protection Bureau), the bank will be fined $100 million for this incident. While this may not make all their customers satisfied, hopefully it will deter similar deceitful practices by Wells Fargo and other banks.
If you want more info, visit the CFBP website and the Wells Fargo website for their Frequently Asked Question.