You probably can’t help but follow the continually unfolding fake account scandal at Wells Fargo. When that story first broke, I wrote that the Wells way to do business – perverse incentives that encourage underpaid employees to cheat their fellow woman and man – is common. Well, today brought more evidence of that.
And if you are gloating about not being a Wells Fargo customer, you might want to carefully examine your credit report for fake accounts.
S&P Global studied the Consumer Financial Protection Bureau’s complaint database and found — surprise! — found that Wells was actually in the middle of the pack for “unsolicited issuance of credit cards” complaints. Lots of banks with names you know had registered more complaints, even when normalized for size. I’m not naming them here because I’m unconvinced the complaints represent a large enough sample size to be meaningful — more in a moment. But here’s what you need to know:
Cross-selling, aggressive customer retention, pushy sales tactics –these things are all symptoms of a company that’s struggling and might likely try to take advantage of you. A wounded animal that might try anything. So check your credit reports and make sure there’s no fake accounts on there from institutions you otherwise work with.
“It is easy to find plenty of consumer complaints about unauthorized accounts at numerous financial institutions. Whether those complaints will translate to regulatory action is another matter,” wrote Zach Fox and Zuhaib Gull in a blog post for S&P.
And while you are at it, check your credit card statements for surprise fees, like a DirecTV early termination fee.
Back to the sample size issue. Wells Fargo attracted 28 unsolicited credit card complaints at the CFPB, the S&P Global report found. But what we know from the consent order is that 565,443 potentially unauthorized credit cards were issued by the bank.
A half million! Compared to 28 complaints.
How do we interpret this discrepancy? It seems undeniable that victims aren’t finding their way to the CFPB. Maybe lots of them didn’t realize they’d been victimized. Or maybe most of them had never heard of the CFPB. Or maybe they think filing a complaint wouldn’t do any good.
Whatever the explanation. it seems that both consumers and the CFPB have work to do. I’ll repeat it until I die: Complaining is like voting. You’ve got to complain so regulators and corporations know something is wrong. Otherwise you don’t deserve to b&&&tch and moan about the problem.
But also, what does this mean for the CFPB, the nation’s most important consumer advocacy organization? It’s new, so it still has to work at name recognition. And, as some critics have suggested, it could have done a better job of getting in front of the Wells Fargo scam and stopping it sooner. One would imagine this relatively low number of complaints, and the fact that they didn’t stick out in the CFPB database, might explain why.
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