Warren blasts Wells Fargo over latest scandal

by Ryan Smith23 Aug 2019

Wells Fargo is back in the spotlight for yet another scandal, and one of the bank’s most persistent critics in the Senate is demanding answers.

Sen. Elizabeth Warren (D-Mass.) sent a letter to Wells Fargo demanding information on the bank’s practice of charging fees to closed accounts. Last week, The New York Times reported that Wells Fargo had kept bank accounts active for months after they had been closed by customers – and charged customers hundreds or even thousands of dollars in overdraft fees for charges made to the closed accounts.

The Times reported that Wells Fargo routinely keeps open accounts that customers have closed – even after the money has been transferred out of the account. That means that when a new charge hits the closed account, it accrues an overdraft fee. Customers often didn’t learn about the issue until contacted by Wells Fargo’s collections department, the Times reported. Many were also reported to a national database of delinquent bank customers, making it impossible for them to open a new bank account elsewhere.

In her letter to Wells Fargo, Warren pointed out that the bank had promised far-reaching reforms after numerous revelations of bad behavior, including opening millions of unauthorized customer accounts and charging mortgage borrowers fees they didn’t owe.

“These new revelations raise grave concerns that despite these assurances, Wells Fargo is still fundamentally broken and has not only continued to scam customers out of thousands of dollars with impunity, but has even targeted customers who were attempting to leave the bank – and may have been victims of previous scams – to unfairly collect one final set of lucrative fees for Wells Fargo,” Warren wrote.

Warren noted that other banks typically stop honoring all transactions on closed accounts beginning on the account closure date. She also listed at least a dozen separate incidents since 2016 in which the banking giant had scammed or lied to customers, employees or regulators.

“This new report suggests that rather than truly committing itself to vital reforms, Wells Fargo is still scamming customers, charging them fees on accounts they thought were closed,” Warren wrote. “This greed has boosted the company’s bottom line, but left customers with lasting negative effects.”