HSBC banking practices are under scrutiny after a federal investigation found evidence of fake bank accounts at other financial institutions.

Financial institutions around the country are on alert after the Wells Fargo scandal brought about the firing of 5,300 employees. Faced with either meeting unrealistic sales goals or losing their jobs, Wells Fargo employees who created fake bank accounts felt such unethical behavior was their only option.

Many said that managers turned a blind eye to the fake account creations because they benefited from inflated sales numbers, too.

Few people outside the banking industry had ever heard of fake bank accounts before Wells Fargo’s systemic problem was brought to light. Employees reportedly created 3.5 million fake checking accounts and opened fake credit card accounts to meet their sales goals.

HSBC Banking Practices Questioned

Now, consumers are becoming more savvy about their bank accounts. With the attention Wells Fargo brought to the highly competitive world of consumer banking, more customers question their financial institution’s practices. HSBC banking practices are among those now being investigated by private consumer protection attorneys.

The Office of the Comptroller of the Currency (OCC) completed a federal investigation into the banking practices and sales efforts of more than 40 of the biggest banks in the country. However, the OCC did not make public the names of those investigated.

The OCC is an independent bureau of the U.S. Department of the Treasury that regulates and supervises national banks and federal savings associations.

According to American Banker, the OCC reportedly found nearly 20,000 bank accounts with compliance issues out of the millions that were analyzed. The OCC also indicated at least 250 individual items that needed to be changed were found at different branches.

Bryan Hubbard, an OCC spokesman, told American Banker in June 2018 that prior to the 2016 regulatory action taken against Wells Fargo, most financial institutions didn’t stress risk governance regarding sales competitions or sales growth. Hubbard said that many banks have since learned how to strengthen policies to prevent the creation of fraudulent accounts and to flag unscrupulous sales activity sooner.

Financial institutions are more apt to contact customers directly if a new account is opened but no activity occurs within the account. Most customers won’t bother to open an account or obtain a credit card if they don’t intend to use it. New, dormant accounts are a red flag to the banks. Customers are then generally called to verify they indeed opened such accounts.

Banking customers are now advised to monitor their checking, savings and credit card accounts for any unauthorized activity.

In addition to the creation of fake bank accounts, some bank sales people have been known to upgrade a checking account without a customer’s consent. If a checking account goes from a standard one that has no required minimum balance to one that requires a minimum of $5,000 daily balance, the account holder could find multiple, unexpected fees on the account statement if the account balance drops below that $5,000 mark.