Several banks like Bank of America (BofA) may have utilized fake bank account practices similar to those formerly adopted by Wells Fargo. But regulators who recently investigated this issue are not publicizing all the investigation results, including the names of the banks investigated.

In 2016 and 2017, Wells Fargo repeatedly made headlines after it was revealed that the bank had adopted unlawful fake bank account policies in order to meet sales goals. Employees of the bank were incentivized to meet sales goals with lucrative bonuses but took deceptive measures to reach their goals. Employees would reportedly open a fake bank account for consumers without their consent.

A total of around 3.5 million fake bank and credit card accounts made as a result of Wells Fargo practice. The bank was eventually forced to pay $142 million in addition to other fines and agreed to revamp the sales goals that motivated the fake bank account practices.

The experience, however, led the Office of the Comptroller of the Currency (OCC) to open an investigation into 40 other large and midsize banks, like BofA and HSBC, to monitor for fake bank account policies.

OCC Findings

In June 2018, the American Banker reported that the investigation by the OCC revealed that several banks may have engaged in deceptive fake bank account practices. Bryan Hubbard, an OCC spokesman, told American Banker that the causes for fake bank account policies seemed to be “short-term sales promotions without adequate risk controls, deficient account opening and closing procedures, and isolated instances of employee misconduct”.

Although the OCC issued industry wide warnings on five issues and over 250 directives for individual banks to fix, the office says it will not make the results of the investigation public. Hubbard did not provide reasoning behind the move nor did he confirm any of the issues found by the investigation.

Hubbard did assure American Banker that the issues were being resolved by the OCC and that banks had already started taking or had taken measures to remedy the problems at their institutions.

“Most banks took timely actions during the review to address weaknesses in policies, procedures, and controls; incentive programs; and their risk governance frameworks,” Hubbard said in an email statement to American Banker. “As a result, systems and controls in these banks are now better integrated and more apt to identify inappropriate sales activities in a timely manner.”

Although no banks were specified by the OCC, attorneys are investigating fake bank account practices by several banks including Bank of America, BOK Financial, Capital One, HSBC, Royal Bank of Canada, and TD Bank.

While legal experts are investigating, customers of BofA and other banks should monitor for potential changes that would indicate that a fake bank account was opened without their consent. BofA and other bank customers should specifically monitor for the following:

• Overdraft Fees: When Wells Fargo opened up a fake bank account for a consumer, they would sometimes remove money from another account. This could result in an overdraft fee which could be a warning sign of a fake bank account.
• Bank Fees: In some cases, fake bank account practices may include the upgrading of accounts without consent. If consumers are charged a bank fee relating to balances, this may be a warning sign of unauthorized account changes.
• Interest Charges: These charges may occur if an unauthorized credit card was opened without consumer consent.
• Credit Report Changes: An unauthorized credit card will also likely appear on a credit report. Any changes to a credit report should be checked thoroughly and reviewed for authenticity.