About a week ago, an unknown Wells Fargo customer was suddenly unable to withdraw money from his bank account.
Wells Fargo said that despite efforts to address the issue, which customers first began noticing on August 3, that a “limited” number of customers were still having difficulties after 24 hours. Some customers admitted that they were unable to withdraw their funds due to critical needs.
It was the second such issue this year for Wells Fargo. The bank declined to comment when asked by NBC News to clarify the exact cause and extent of the problem.
Further investigation recently found that a third-party impersonator had created fraudulent accounts at Wells Fargo, which the bank denied wrongdoing, and the problem spreads across the financial services industry. said.
At least other banks have experienced unexplained power outages to discourage customers from rushing to withdraw money. Some depositors at Green Dot Bank, a third party that works with Walmart to provide financial services, said they have been unable to withdraw funds from their accounts for days or weeks.
The difficulties faced by Wells Fargo and Green Dot customers reflect a dramatic increase in complaints against financial services firms in recent years.
Complaints of all categories have increased since the pandemic, but the Consumer Financial Protection Bureau is focusing on an increase in complaints about credit rating agencies. In one of those reports, the agency noted that “many consumers did not receive substantive responses to their initial complaints” against such companies.
According to the CFPB report, “When dissatisfied consumers file complaints in the hope that the original problem will be resolved, these substantive responses can increase the total number of complaints.” It says.
At the same time, the Associated Press reports that more people than ever before are losing billions to scammers, with consumer losses due to fraud reportedly totaling $8.8 billion in 2022. That’s a 30% increase compared to 2021.
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In general, it has never been more difficult for customers to get timely responses from financial institutions, experts say.
“It’s been a really tough time for customers these days,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.
It’s a harsh reality that has become even tougher in recent years. Greg McBride, senior vice president and chief financial analyst at Bankrate, said companies are increasingly shifting to business models focused on waiting for troubled customers to clear up.
“We are continuously pushing to cut costs,” McBride said. “Customer service is seen as a cost center, not a revenue driver, and businesses can avoid it.”
Wells Fargo said in a statement that it puts its customers first.
“We take customer complaints very seriously and when issues are raised we act quickly to resolve them,” the company said, adding that the overall volume of direct customer complaints received was “2019. It has declined significantly since then,” he added.
A Green Dot representative said in a statement that the agency is “focused on completing technology transformations and handling and resolving service disruptions as quickly as possible.”
Even in extreme situations where a customer considers legal action against a financial institution, they are usually faced with the harsh reality of mandatory arbitration clauses. Customers typically sign this clause when opening an account. This provision requires customers to submit disputes with banks to private arbitrators, who are often chosen by the company.
Established in 2011 to resolve customer disputes with banks and financial firms, the CFPB can intervene against individuals and groups, but results may take time.
Between October 1, 2021 and September 30, 2022, the CFPB sent approximately 745,400 customer complaints to businesses for consideration and response, and businesses responded to approximately 99%. said it could take two weeks or more for companies to respond. reply.
Since its inception, the CFPB has sent 4 million complaints to businesses on behalf of consumers and received $17.5 billion in financial compensation, according to the CFPB’s July 2023 data.
Relying on the news media could also prove effective in getting a response, Rheingold said. But these days, it’s more likely a local television station than a newspaper that has shrunk in size and scope.
In general, a good rule of thumb to maximize the chances of a timely response is to be the proverbial “squeaky wheel,” Rheingold said.
“Noisy, frustrated,” he said. “They threaten to move your business or money.”
