Consumer complaint received 2023-06-05 00:00:00
Product: Money transfer, virtual currency, or money service — Domestic (US) money transfer
Issue: Fraud or scam — 
Company: WELLS FARGO & COMPANY
State: KS

Complaint narrative:
On the afternoon of XX/XX/2023, I was preparing to take my XXXX XXXX  daughter to the XXXX  office because she was not feeling very well. As I was getting ready to go to the doctors office, I received a phone call from a gentleman who I believed was a Wells Fargo representative. He informed me that there was suspicious online activity on my account and that it appeared someone was taking {$8400.00} from my credit card. The person asked if I authorized this. I informed the person that I never authorized anyone to take {$8400.00} from my credit card. The person told me he would assist me by suspending the account, changing my online username and password, cancelling the credit card, and sending me a new card. In the past, Wells Fargo representatives have called me about unauthorized credit card usage and have suspended my account and sent new cards following a phone call with the representative, so the call on XX/XX/XXXX did not seem unusual. On the date of the incident, I was on XXXXXXXX XXXX  from work and caring for my daughter, so my time was limited. I wanted to get everything taken care of as soon as possible and restore my account, so I stayed on the phone talking with the person to try to resolve the issue. 

During the conversation, the person reminded me to never share my username and password with anyone. The person also stated he would send a secure text message to my phone allowing me to securely enter my new username and password so that I could change my online login credentials and secure the account. I complied and texted my username and password. During the exchange, the person also texted me a secure code asking me to repeat it to him so he could verify my identity, which Wells Fargo representatives have done several times in the past. I told the person I had to go to the XXXX office and was told I would receive a call back. I never received a call back, so I called Wells Fargo to follow up a day or two later. That is when I discovered that the person ( fraudster ) I spoke with was impersonating a Wells Fargo representative and had used my username and password to transfer {$8400.00} from credit card to my checking account and then wire {$8400.00} from my checking account to an account at the XXXX XXXX XXXXXXXX. The Wells Fargo representative helped me open claims related to the transactions. The representative also acknowledged that fraud had occurred on the account and told me that my account would be credited back {$8400.00} while an investigation was pending. 

Initially, I thought there was only an online balance transfer from my checking account to my credit card account. I did not realize until a week or two later that a wire transfer had also been processed. 

Following the investigation, I received two letters from Wells Fargo in early XXXX. The first letter, dated XX/XX/2023, stated there had been no fraud, as I or someone I knew had authorized the transaction. The second letter stated the claim was being denied because the funds had been wired and could not be retrieved. After receiving this result, I contacted Wells Fargo on almost a daily basis in XX/XX/2023. I spoke with several individuals in the Online Fraud Department and the Executive Office. I was given the run around and transferred from person to person each time I called. There were also several claims opened in XXXX. I was always told that a claim would be open to address my concerns, and then I would receive notice that the claim had been denied because there was no fraud. 

In early XXXX, I attempted to go to a Wells Fargo branch location in XXXX, Kansas where I reside, but the Branch Manager there informed me that they did not handle fraud claims inside of the branch and that I would need to call Wells Fargos fraud department for assistance. 

In XXXX, I contacted the Consumer Financial Protection Bureau ( CFPB ) and filed a complaint, the results of which are still pending. I also called Representative XXXX XXXX Office and was told that all they could do is contact Wells Fargo and check on the status of the claims. XXXX XXXX Office recommended that I contact the Kansas Attorney Generals Office which led me to file this complaint. 

On XX/XX/2023, I filed a police report with the XXXX Police Department after it became clear that Wells Fargo was not willing to provide a meaningful resolution that would restore my account balance. 

On XX/XX/2023, I also went to the Wells Fargo branch location in XXXX, Kansas and spoke with the Branch Manager, XXXX XXXX. XXXX XXXX listened to my concerns and seemed hopeful that a resolution could be reached. She called the Online Fraud Department, explained what happened and claims were opened again for the online transfer and for the wire transfer. XXXX also told me that she was informed that the claims had originally been denied because they were filed in the wrong department. She told me to keep her updated on the status of the claims. 

On XX/XX/2023, I called Wells Fargo to get a status update on the claims. I was transferred to the specialist assigned to the wire transfer claim. She informed me that wire transfers are not insured, which gave me the impression that she already intended to deny the claim. 

I am a XXXX working professional. My husband and I have XXXX XXXX XXXX  children, a XXXX XXXX XXXX and a XXXX XXXX XXXX. We do not receive financial help or assistance with childcare from our families, as both of our families live far away. We recently purchased a home in XXXX and welcomed our XXXX child into our family. We pay XXXX daycare fees in addition to a monthly mortgage and other necessary expenses. It is a struggle to survive during these hard financial times. I provide this background to show that we are hardworking and productive members of our community, and we are not in a position to absorb such a large loss as {$8400.00} at the whim of a fraudulent actor who had no actual authority to use my credit card for a transaction we did not benefit from. 

My case is unique in that it was not simply a wire transfer, but it was a combined transactionan online balance transfer between two accounts ( credit and checking ) followed by a wire transfer. The combined transaction was initiated with an online credit card transfer from my credit card to my checking account in the amount of {$8400.00}. Such electronic funds transfers ( EFTs ) are covered and protected under the Electronic Funds Transaction Act ( EFTA ) - Regulation E, which specifically address situations where a fraudster impersonates a bank representative and induces a customer to unknowingly provide their login credentials and then uses that information to perform an unauthorized EFT that the customer does not actually authorize or benefit from. In such situations, the customer is not held liable for the transaction, and the bank is required to return the funds to the customer. Additionally, Wells Fargo has a Zero Liability policy for credit card users which provides that the customer is not responsible for fraudulent credit card transactions that are reported promptly. I promptly reported the fraud on XX/XX/XXXX or XXXX as soon as I realized that I did not receive a call back from Wells Fargo regarding the fraud alert as promised. My credit card has been debited {$8400.00}, and that amount should be returned to me pursuant to Regulation E and Wells Fargos own Zero Liability credit card policy. 

Wells Fargo has indicated that the reason my account has not been credited the {$8400.00} is that the funds were later wired outside of the bank and wire transfers are not insured. However, as stated earlier, this was initiated as a credit card balance transfer, my credit card account has been debited {$8400.00}, and as such the transaction is covered under Regulation E and Wells Fargos own Zero Liability policy. Additionally, under the circumstances presented, Wells Fargo is responsible for the wire transfer, not me. UCC 4A applies to wire transfers and affords customers protection in the event of fraudulent transactions such as the one in this case. Under UCC 4A, a financial institution will be held liable for a fraudulent wire transfer if it failed to act in good faith in approving and paying the wire transfer. Here, Wells Fargo did not act in good faith in approving the wire transfer. I have been a customer of Wells Fargo since the XXXX Over decades spent as a customer, I never initiated a wire transfer. Wells Fargo should have known that a wire transfer initiated from my account was an unusual activity and should have alerted me and inquired as to whether I actually authorized it. Additionally, the checking account that the funds were wired out of normally always has a {$0.00} balance or a very low, marginal balance and Wells Fargo should have noticed that it was unusual that {$8400.00} was transferred to that account. Moreover, my account history shows that balance transfers from my credit card have never been over {$500.00}, so the amount of {$8400.00} was suspicious and should have prompted the bank to call me to verify that the transaction was actually authorized, which would have prevented the entire theft. In the past, Wells Fargo has called me to notify me that much smaller amounts, for example {$200.00}, were being used from an unusual location, but in this case, it never informed me that {$8400.00} were being used from an unusual IP address. Wells Fargo did not even initiate a request to retrieve the funds from XXXX XXXX XXXXXXXX until weeks later when I discovered a wire transfer had also taken place. 

In this situation, Wells Fargo was in the best position to prevent the theft by not releasing the funds under such suspicious circumstances. Here, Wells Fargo took no action despite numerous red flags and suspicious activities on my accounts and did not even call me to verify that the transaction was authorized which would have led to discovery of the fraud and prevented the entire theft. Wells Fargo did nothing and did not follow its normal, established procedure of calling me and verifying suspicious credit card activity. Wells Fargo acted in bad faith and is liable for the wire transfer. My account should be restored in full, and the {$8400.00} that was fraudulently stolen from my credit card should be returned immediately. Please let me know if you have any questions or need additional information from me. 

Thank you so much for your time and assistance with this matter.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation