Here’s how to see if Wells Fargo clients are the only ones who potentially have unauthorized accounts in their names.
Approximately one month has passed since a federal regulator revealed that other banks had opened accounts for consumers without their consent.
Which banks opened unlawful accounts is still a secret, according to the Office of the Comptroller of the Currency. Around 10,000 of the 500 million to 600 million new accounts registered over a three-year period did so without permission, the agency’s chairman revealed during a Senate session.
Customers with queries should get in touch with their banks immediately, advises an OCC representative. Through HelpWithMyBank.gov, you can also complain to the OCC. In addition, experts advise that you act right away if you are unsure whether you have an account that you did not consent to opening.
Not a significant issue
The OCC came to the conclusion that creating accounts without permission wasn’t a substantial issue for the industry after looking at more than 40 large and midsize banks. However, that does not imply that the problem, as well as others involving bank sales techniques, have not been addressed.
According to Chris Vanderpool, an analyst at S&P Global Market Intelligence, “the regulatory community is highly aware of this issue and takes it seriously.” “For instance, the OCC issued 252 items requiring attention, or MRAs, as part of its review. If the involved bank does not promptly fix the problem, MRAs may result in official enforcement procedures.
Twenty percent of the 252 instances have been resolved, according to the OCC chief. The remainder continue to be examined.
However, there was debate about the agency’s choice to withhold its conclusions from publication. According to senior director Ed Mierzwinski of the U.S. Public Interest Research Group, the OCC hasn’t been forthcoming.
Possible effects
Some people described the circumstance as a chance to think about changing banks. However, it can take some time before there are significant departures from the established banking institutions.
It could be too soon to predict whether clients will significantly stop doing business with the biggest national banks as a result of the OCC’s findings, according to Vanderpool. In the end, these institutions still have extremely strong deposit franchises and can entice consumers with the best online and mobile product offerings. For many consumers, convenience is also important, therefore the large national banks’ branch networks are enticing.
Colin Walsh, the CEO and co-founder of Varo Money, a mobile bank that doesn’t charge any fees, predicts that more customers will look for alternatives to traditional brick-and-mortar banks in the future, despite the fact that switching banks can be intimidating.
“I do think there will be a gradual attrition away from big national banks,” he asserts, “especially as Americans realize there are credible alternatives, like Varo, that can do a better job and actually help them increase their financial health rather than relying on predatory fees to support the high overhead that brick-and-mortar institutions have.”
When being ignorant is not bliss
Even though a small percentage of people can have unauthorized accounts, it’s important to be aware of any credit cards that are issued in your name. When you next want to apply for a mortgage or a vehicle loan, it can affect your credit score and keep you from getting better rates.
New credit only makes up 10% of someone’s FICO credit score, which lenders frequently use to determine credit-related choices. Therefore, the impact on your credit score from a single inquiry — or a request to check your credit to determine whether you qualify for a credit card or a loan — should be “minuscule,” according to Bruce McClary, spokesman for the National Foundation for Credit Counseling. However, the impact on your credit score may become more apparent if several enquiries and loan applications are made in a short period of time.
The fact that the (unknown) account appears on your credit record and is still open worries McClary more, he adds.
For instance, if a credit card has an annual charge and you weren’t aware that it was opened, you can be in danger.
“What do you think happens with that cost if you never received the bill and you’re not even aware the account even exists? It is not paid, and when that fee is not paid, the account begins to lapse, according to McClary. That will damage your credit report, I said.
Check your credit report frequently.
Regularly checking your credit reports is the greatest method to avoid getting a credit card or loan you weren’t aware of. Every year, you are entitled to a free one from each of the three main credit bureaus. Appcn7 also offers a free credit report check.
Contact your creditor and the relevant credit bureau to dispute any unauthorized accounts that appear on your credit record (depending on whether the error was on an Experian, TransUnion or Equifax report).
You must request a report from ChexSystems, a consumer reporting company that maintains track of your financial activities, McClary advises, in order to determine whether you have an unlawful checking or savings account. One free consumer report each year is available to you.
It doesn’t hurt to keep an eye on your bank statements either. Make sure nothing that you didn’t allow and could be costing you money has been enrolled in, such as overdraft protection.
