Wells Fargo Fined $250 Million for Unsafe or Unsound Practices

Wells Fargo has been fined $250 million by the Office of the Comptroller of the Currency for “unsafe or unsound practices” related to the bank’s home lending business. Wells Fargo’s top federal banking regulator, OCC, imposed the penalty for misconduct “related to material deficiencies regarding the bank’s loss mitigation activities and violations fo a 2018 consent order issued by the agency. 

The order in 2018 required Wells Fargo to take actions to account for the deficiencies in its risk management program. This included a new risk management plan and forming an independent committee that would evaluate its progress. The 2018 order noted the misconduct related to mortgage, auto loans and other violations. 

The CEO of Wells Fargo, Charlie Scharf stated: “Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority”. 

The OCC had also issued a cease and desist order against Wells Fargo on Thursday that restricts the bank from acquiring certain third-party residential mortgage servicing and requires the bank to ensure that borrowers are not transferred out of the bank’s loan portfolio until remediation is provided. 

The OCC said it issued the order due to the bank’s failure to establish an effective home lending loss mitigation program. Loss mitigation refers to the process in which mortgage lenders and borrowers seek alternatives or work together to avoid foreclosure. 

The fine comes nearly fine years to the day after the discovery of Wells Fargo’s fake accounts scandal in 2016. The bank is still operating under the $1.95 trillion asset cap imposed by the Federal Reserve in the aftermath of the violations. 

Effective Wednesday, a Consumer Financial Protection Bureau’s consent order issued in September 2016 regarding the Wells Fargo’s  retail sales practices had expired, according to the bank. 

Scharf referred to the orders expiration as a reflection of the bank’s progress. He stated: “We have done substantial work designed to ensure that the conduct at the core of the consent order — which was reprehensible and wholly inconsistent with the values on which this company was built — will not recur.”

For more than a decade, hundreds of thousands of Wells Fargo employees opened millions of fake accounts in customers’ names, among other misconduct. 

At least 11 former bank executives have been charged by or settled with regulators since the misconduct was discovered. In early 2020, Wells Fargo agreed to pay $3 billion to resolved the criminal and civil probes of its phony sales practices between 2002 and 2016. The bank has also entered into a deferred prosecution agreement. 

T-Mobile Data Breach

T-Mobile - the cellar service provider - has confirmed that hackers stole sensitive personal data of more than 40 million former and prospective customers (those who gave the company personal information to run credit check) during a data breach on August 16th. An additional 7.8 million current T-mobile customer accounts were also hacked.  The stolen data included information such as Social Security numbers, driver’s license information, birth dates and more.  

The company stated that phone numbers and financial information, such as bank account numbers and credit card numbers were not included in the hack. 

Protecting Yourself After a Data Breach

Although T-Mobile claims payment information wasn’t obtained during the breach, it is in the best interest of customers to assume their information is out there.  When personal information falls into the hands of criminals, identity theft and fraud quickly become a major problem that is difficult to counter. Acting quickly can save you a lot of grief down the road. 

Steps To Take: 

Freeze your credit

Freezing your accounts is one of the most important steps you can take if you believe your data may be compromised. Freezing your credit blocks lenders from being able to review your credit report to approve a new line of credit. That means you won’t see any surprise credit cards or loans taken out in your name. 

To freeze your credit, you need to contact each of the major credit bureaus - Equifax, Experian, and TransUnion - directly. The bureaus will require information to verify your identity, such as SSN, a copy of your photo ID and proof of residence to approve the freeze. Some bureaus assign a PIN that is required to unfreeze your credit report. 

It will not cost you anything to freeze your credit report and doing so will not affect your credit score. A freeze can be temporarily or permanently lifted at any time. 

Check Your Credit Report

Even if you freeze your credit report, it is a good idea to request copies of your reports from each bureaus to check if any fraudulent activity has occurred. Due to the pandemic, all three bureaus are granting free access to credit reports weekly through April 2022 at www.annualcreditreport.com  This site works directly with the three bureaus to allow customers to pull their reports via a simple web portal. 

Your reports show a detailed history of your payments and balances for various credit products, including credit cards, mortgages, cars, personal and student loans. The reports will not show your credit score. 

When reviewing your reports, you may find fraudulent or inaccurate information. In that case, you want to work with the bureaus to dispute the information and have it removed. If you believe that you are a victim of fraud or identity theft, you may also want to report it to the Federal Trade Commission at identitytheft.gov 

Monitor Your Bank Accounts

T-Mobile states that credit and debit card information isn’t included in the data breach, but it is important to keep a close eye on your bank accounts for suspicious activity. If you see charges that you haven’t made, call your bank immediately to report the fraud. 

If you are still having trouble with disputing information and you are a victim or fraud or identity theft, let us know and we can help! 

Identity Theft By Family or Friends

Identity theft isn’t always committed by a stranger or a mystery hacker. Oftentimes, when your identity is stolen, it is taken by someone who know. In 2014, there were approximately 550,000 identity theft and fraud victims reported that was committed by someone they knew and the numbers have likely raised.

It is hard enough to deal with a stolen identity, let alone when it is perpetrated by someone you know.You may feel betrayed, violated, and your trust may be broke. It might be difficult to trust anyone again. These are valid feelings to have.

When the theft is by a family member or friend, you may have a hard time turning that person in or filing a police report because of the ramifications it will have for that person and the judgement by your other family members. They may even pressure you to let the matter go. It is even trickier when your spouse is the one who stole your identity. 

What is Identity Theft 

Identity theft happens when someone uses your identity for their own financial gain. It could be for making purchases, qualifying for a loan, or getting approved for a credit car, among other things. 

Parents may be under the impression that using their child’s information for financial gain is okay, but that is a form of identity theft. Some other examples include:

• A family member uses your name and SSN to qualify for a credit card or loan.

• A parent uses their child’s name and SSN to sign up for utilities or cable.

• A family member uses another family members name and SSN to qualify and sign for a lease.

• A spouse uses your name and income without your permission to open an account without you knowing.

Often, you may not know that it has happened until you have a delinquency on an account, an outstanding debt under your name, or an unfamiliar account on your credit report. It is still considered a crime that needs to be corrected even if it hasn’t gone into collections. 

What To Do

Once you realize that your information has been stolen you need to contact the creditor and business and explain that you are not responsible for the debt. You should also file a police report. This is the only way that you will be able to fix your credit report. You need to also place a fraud alert with the credit bureaus and report the theft to the Federal Trade Commission (FTC). It is difficult to file a police report on someone that you know, but it is a must if they have jeopardized your financial future. 

What if Friends or Family Do Not want you to File a Report?

If you are being pressured to let the situation go by friends or family members, you have to realize what is at stake if you do not report the theft. Your credit history is on the line, and you will ultimately be the one responsible for repaying the money owed unless you take the necessary steps to dispute the charges. If the person gets away with the theft, you might be putting others at risk as well. They may feel that they can get away with stealing someone else’s identity if they see it as an easy task. 

Other Ways to Protect Yourself

You will possibly need to change your bank account number as well as close all the accounts that you currently have open. You should take the time to set up alerts on your credit report. This will help protect you from identity theft in the future. 

If your credit card(s) are stolen, you are at an even greater risk of having your identity stolen. You will want to carefully monitor your statements. You should be requesting your credit report every few months to check over your information. Right now, credit reports are free weekly from www.annualcreditreport.com until April 2022. Many banks are now offering free credit report tracking as well. 

Dealing With Your Family After

You need to remind yourself that identity theft is not your fault, and you did not do anything wrong. You will likely be dealing with feelings of betrayal regarding the person who did this. You should take the time to seek advice on how to communicate with them, what boundaries you need to set up, and if it is possible to maintain the relationship.   You should always be cautious about how you share your information with friend and family members. 

Let us know if you have questions on dealing with this type of situation. 

COVID-19 Identity Crimes on the Rise

The number of COVID-19 identity crimes are expected to rise in 2021. The Identity Theft Resource Center (ITRC) has new data that shows an increase in identity crime victims being targeted multiple times. The rate was 21% in 2018 and increased to 28% in 2019 before the pandemic. 

With the stress of COVID, identity theft is not the top focus of people right now and victim resources are getting harder to research. The U.S. Department of Justice funds allocated for crime victim services has dropped from $3.7 billion to $1.9 billion since 2018. New fraud cases and identity crime victims are likely to increase with the pandemic-related benefits and stimulus payments due early this year. 

2020 was a difficult time for many people and it continues to affect them today. Some have lost their jobs and others had to close their businesses. There have been millions of state unemployment benefit-related identity theft cases that have been detected across the U.S. since March 2020. The ITRC receives less than 20 inquires regarding unemployment benefits in a year on average but in 2020 they received more than 700 unemployment benefits fraud victims inquiring for help. A sharp increases in scams was seen also. This has given criminals countless opportunities to trick people with phishing scams, charity scams, healthcare scams and work-from-home scams. 

What Will 2021 Bring?

Identity crimes are expected to impact victims well into 2021. Many victims may not even realize that their identity information was misused until they received their IRS Form 1099 for non-wage income. The research by the ITRC shows a significant increase in identity crime victims being victimized a second time, even before the rise of fraud, scams, and identity crimes in 2020. An analysis of the post-pandemic shows an even greater spike. 

The ITRC and other private-sector researchers show that cybercriminals looking for profit are using consumer’s and employee’s bad security habits, as well as the changing work environment, to attack businesses more often. Resources for cybersecurity training and education along with identity-related crime victim assistants are lessening. 

The U.S. Department of Justice (DOJ) funds allocated for all crime victim services has dropped from $3.7 billion in 2018 to $1.9 billion. Discredtionary DOJ grants awarded to victim services organizations has dropped from $311 million in 2019 to $144 million in 2020. Funding for programs that support victims of identity crimes, compromises, cybercrime, scams, and fraud have been reduce to $0. According to the cybersecurity firm Coveware, ransomware payments have grown on average from less than $10,000 per incident in 2018 to $233,000 as of the third quarter of 2020. Some large enterprises are reportedly paying ransoms over $1 million. The most common cause of ransomware attacks is stolen credentials to access a business system or network remotely. 

Research by the ITRC that will be published in May 2021 shows that there is an increase in identity crime victims being targeted multiple times. It could be even worse after the rise in crimes committed during COVID. 

Data shows that the COVID identity crimes will continue in 2021. More victims will suffer from trauma of a second, or even third crime. Getting the fraud resolved can be a daunting process and some victims will have trouble meeting their basic needs or find a job because they will not pass a background check until the fraud is resolved. Winning the battle to protect ourselves from cybercriminals will require us to devote more resources toward assisting victims and devote more time and attention to educating consumers and employees of their need to be cyber-aware and vigilant. 

If you believe that your information maybe have been compromised, contact us on our page for resources and help. We can direct you on how to solve this issue and guide you through a potential lawsuit. 

FTC is Launching Identity Theft Awareness Week

The FTC is launching an Identity Theft Awareness week. We will be doing the same. Follow us on social media to gain more insight.

Below is from the FTC website with helpful links and information.

FTC Marks Identity Theft Awareness Week with Events to Help Consumers Identify Risks of Identity Theft During the COVID-19 Pandemic

The Federal Trade Commission is launching Identity Theft Awareness Week, February 1-5, 2021, with a series of events to highlight steps consumers can take to help reduce their risk of identity theft and recover if identity theft occurs.

Identity theft happens when someone steals personal information about you such as your Social Security number or credit card information, and uses it to commit fraud. Reports about any type of identity theft topped the list of consumer complaints submitted to the FTC through the third quarter of 2020.

As part of Identity Theft Awareness Week, the FTC will participate in webinars and other events to highlight what you can do to protect your personal information, red-flag warning signs of possible identity theft, and steps to take if identity theft happens to you. Events include a webinar on Monday, February 1, with Identity Theft Resource Center and FTC experts discussing identity theft during the pandemic, and a Facebook Live discussion on Thursday, February 4, hosted by the AARP Fraud Watch Network, focused on COVID-19-related identity theft, current trends, and ways to protect yourself.

You can find the full list of events at ftc.gov/IDtheftweek, along with details on how to participate and tips on how to reduce the risk of identity theft.

The Federal Trade Commission works to promote competition and to protect and educate consumers. You can learn more about consumer topics and report scams, fraud, and bad business practices online at ReportFraud.ftc.gov. Like the FTC on Facebook, follow us on Twitter, get consumer alerts, read our blogs, and subscribe to press releases for the latest FTC news and resources.

For Consumers

Identity Theft Awareness Week Calendar of Events

More news from the FTC >>

Only One-Third of Americans Checked Their Credit This Year

CompareCards have conducted a survey for the third year in a row in August 2020 following the massive data breach from Equifax four years ago. Only thirty-three percent of Americans have checked their credit reports in the past year. This is a concern since there have been an increase in credit card fraud attempts during the Covid-19 pandemic. In 2019 39% checked their reports and in 2018, just 37%. It is most crucial to be checking your reports at this time because it has never been easier. For the past four months until April 2021, consumers are able to check their credit reports for free once week, instead of just once a year through AnnualCreditReport.com.

Consumers aged 75 and older are at most risk for credit card fraud and only 20% of this age group has reviewed their credit report in the last year. Cardholders are taking less action to prevent identity theft. Here are some steps to take to prevent identity theft:

• Review online banking and credit cards often

• Check your credit score

• Activate alerts via text, email, etc to inform you when changes are made

• Review your credit report

• Change passwords to your banking and credit card sites

• Change the PIN on your ATM card

From a group of the surveyed consumers, 41% of cardholders were unaware that they had the option to check their credit report for free weekly due to the pandemic. Twenty-eight percent of those surveyed admitted that they did not plan to take advantage of this free allowance. Checking your credit report every week isn’t necessary but checking it once a month will put your mind at ease and keep you up to date and it won’t do any harm. Once you take a look at the reports one or two times, it will give you a good idea of what it looks like and you will have an easier time finding mistakes and errors, if they were to occur. Consumers who don’t have a credit card or a loan are more likely to feel that they do not need to review their reports as often. There is too much fraud out there to not keep tabs on your file. 

Only half of credit or debit cardholders check their credit score each month and a third of those admit that they do not always review their card or bank statements to ensure accuracy. Women are dropping the ball on checking their reports with only 41% doing so monthly as opposed to men at 59%. Breaking down to different generations, Gen Xer’s are best about checking their scores followed by Millenials. 

The fatigue of the pandemic may be distracting from the focus of identity theft. There has been an economic downturn and rampant job loss which is understandable why some consumers may be more focused on other areas of their personal and professional lives than they are of identity theft. More people are at home more often, so instead of binging out on Netflix during downtimes, we could be keeping up to date on identity theft. 

Most people are hesitant about providing their personal information online but nearly 47% of people with a credit or debit card provided their entire social security number in an online form in the past month according to the survey. In 2019 it was 40%. This increase may have occurred due fluctuations in the job market and people applying for unemployment and onboarding at new jobs online. Even providing a partial SSN causes concern. This puts consumers more at risk for identity theft, which makes checking your reports and statements a priority. 

Seventy percent of cardholders have reported using the “sign in with “Facebook” feature to sign up or log in to various websites. While this is a convenience, using your Facebook account to log into other multiply accounts can be problematic. There has been security concerns about Facebook’s ability to protect personal data. The information you are giving has an increased risk of being exposed which is a major target for hackers. Facebook is a signal site that contains information about you that are useful to hackers. Facebook has a past for not keeping data safe so it is important to proceed with caution when you login to other accounts or webpages. 

Nearly half of cardholders (47%) were victims of a data breach within the last year and 14% of them experienced this harm more than once. Consumers may want to take stronger steps to protect their identity such as:

• Freezing your credit- With a credit freeze, or security freeze, you can restrict access to your credit reports and prevent others from opening new credit-related accounts with your information. You will still have access to your credit reports during the freeze and your credit score will not be affected.

• Sign up for alerts - Many companies are on the market to provide services that monitor for identity theft as well as keeping an eye out for Social Security number scanning. 

• Create safer digital habits - You can set calendar reminders to change important passwords often and learn to recognize the signs of phishing emails and other online scams. It is important to remain cautious when providing personal and financial information online and you may even want to invest in security software for electronic devices. 

Most of all it is important to realize that you, as a consumer, have your financial health and security in your own hands. Nobody cares as much about your credit and money as much as you do. It is vital that you protect your personal information and finances because no one else can do it for you.