A computer glitch at Wells Fargo caused hundreds of people to lose their houses, the multinational financial services company admitted in November.
An estimated 545 customers lost their homes out of approximately 870 customers after they requested modifications to their loan payments, CBS reported. Their requests were denied due to incorrect calculations influenced by the glitch, and subsequently, around 60 percent of them went into foreclosure. The bank revealed the error upon filing papers with the Securities and Exchange Commission last month.
The miscalculations affected bank customers who submitted loan modification applications anywhere during the eight year period from March 15, 2010, to April 30 this year, according to Wells Fargo.
CBS interviewed a Wells Fargo customer Jose Aguilar who said he had lost his home and damaged his credit after his loan modification was denied due to the glitch, adding that his family had also fallen apart.
“I want Wells Fargo to know that there’s people out there with feelings and families that try hard to pay their bills and survive. We’re real people, we’re not just money,” Aguilar told CBS.
Wells Fargo sent Aguilar a letter in September apologizing for his loan modification that was denied three years earlier, stating that the decision was in error. He received a check for $25,000, which is not enough to cover his losses, Aguilar’s lawyer said, reported CBS.
Alys Cohen from the National Consumer Law Center still has questions for Wells Fargo on the cause of the huge loss to so many customers.
“The question is, how did this happen? Aren’t they supposed to check their computer programs regularly to make sure they’re accurate?” Cohen told CBS. “This is clearly more than just a simple computer mistake.”
Constant Trouble at Wells Fargo
Wells Fargo has seen a constant stream of scandals in recent years. The trouble started in September 2016, when regulators said employees at the company created as many as two million unauthorized bank and credit card accounts without customers’ knowledge.
According to a former employee and whistleblower at Wells Fargo, who tried to bring a stop to the practice seven years ago, the bank and its staff had been pushed to achieve unrealistic sales goals, CBS News reported. The pressure led employees to create the fake accounts.
For the rest of 2016, Wells Fargo was hit with a $185 million fine and announced it was firing 5,300 employees. Both California and the Department of Justice launched probes on the company. The bank was then accused of illegally repossessing 450 cars. The CEO stepped down and was replaced.
In January 2017, the bank said it had been told that its whistleblower employees had faced retaliation for their actions. Four senior employees were fired. The bank was accused of “discriminatory and illegal” practices. The federal banking regulator downgraded Wells Fargo’s community lending rating.
Then in June 2017, the bank was accused of modifying mortgages without authorization. In July 2017, the bank admitted to charging at least 570,000 clients for unnecessary car insurance, causing possibly tens of thousands to default on car loans, according to Think Advisor. The bank was then sued in October for allegedly overcharging small business clients on credit card transactions. It also admitted to wrongly fining around 110,000 mortgage clients. In November 2017, the bank also admitted to repossessing another 450 cars illegally.
As a result, in February 2018, the Federal Reserve halted the bank’s ability to grow assets until governance and controls were improved. The problems for the bank continued to make headlines up until the public was made aware of the latest computer glitch issue.
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