As far as big banks go, Wells Fargo has had a bit of a rough time. Well, maybe not Wells Fargo so much as the bank’s customers.
Back in January we learned of a computer glitch that led to Wells Fargo account holders being double billed for transactions. Going back to 2017, even, millions of their customers were enrolled in unauthorized services and their personal data was put at risk.
Now there is word of another issue, one that has had some serious ramifications for those affected. How serious? They lost their homes.
Another computer bug is to blame
Wells Fargo said the bug led to certain customers being denied a loan, when in fact they should have been eligible for one. The bank said there were 625 such customers, with about 400 of them ultimately having their homes foreclosed.
The bug impacted accounts between April 2010 and October 2015, Wells Fargo admitted, with this all coming about after the bank faced inquiries from government agencies over how it went about purchasing federal low-income housing tax credits.
In a statement, Wells Fargo said it was “very sorry that this error occurred” and that it was providing remediation to the customers who were wronged. The bank has set aside $8 million to compensate the customers, which would average out to just $12,800 per customer.
If the money just went to those who lost their homes, it would be about $20,000 per customer. Either way, it is not nearly enough to make much difference for those who lost their homes.
Even though they are paying out some money, Wells Fargo is claiming there is no clear or direct cause and effect relationship between the loan denials and foreclosures. However, the bank has admitted many of those who were denied ended up being foreclosed upon.
Another one of Wells Fargo’s many problems
Does it seem like Wells Fargo is always in the news for something bad? There were the aforementioned issues above, but that’s not all.
In fact, in the same week that the computer bug was revealed, the bank agreed to pay a $2.1 billion fine for issuing mortgage loans it knew contained bad information. The U.S. government said the loans helped contribute to the 2008 financial crisis.
Furthermore, back in June the bank was accused by the federal Securities and Exchange Commission of taking advantage of mom-and-pop investors by offering complex financial investments. Wells Fargo did not admit nor deny the claims, only saying at the time it was cooperating fully with the probe.