Two senators want details on how seniors were affected by Wells Fargo fraud scheme
By: Vicki Needham
Two senators are requesting more information from a federal regulator about whether the nation’s seniors were disproportionately affected by Wells Fargo employees who opened bank and credit card accounts without authorization.
Sens. Claire McCaskill (D-Mo.) and Susan Collins (R-Maine), who lead the Senate Aging Committee, sent a letter on Monday to Consumer Financial Protection Bureau Director Richard Cordray asking for a meeting to discuss additional details of the multi-million dollar fraud scheme.
“We have concerns about the impact this activity has had on our nation’s senior population, especially those who do not conduct their financial business on the Internet,” the senators said in their letter.They noted that only 56 percent of adults over age 65 use the Internet, according to the Pew Research Center.
Last week, the CFPB announced that thousands of Wells Fargo employees had illegally opened millions of credit and deposit accounts that consumers had never requested in order to boost their sales totals.
"As Wells Fargo begins the long process of identifying and making restitution to the consumers who were defrauded, I want to ensure that seniors — who are often the targets of fraud and who also can be harder to find and make whole — are adequately protected,” said McCaskill, the panel’s top Democrat.
McCaskill and Collins are asking if the CFPB has identified how many customers over age 65 were affected, how they will ensure victims receive restitution and whether they are working with other branches of the government to pursue civil or criminal penalties.
The senators also want to know if the CFPB is looking into whether other financial institutions are involved in similar schemes.
Last week, Wells Fargo was ordered to pay $185 million in fines, including a $100 million fine to the CFPB, the largest ever levied by the regulator.
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The CFPB said that Wells Fargo employees applied for approximately 565,000 credit cards and 1.5 million deposit accounts over five years that may have not been authorized by consumers. In some cases, the employees transferred money into those accounts to activate them.
Wells had repaid $2.6 million to customers for overdraft and other fees and has set aside a total of $5 million to cover those costs.
The bank has fired more than 5,300 employees who opened the fraudulent accounts.