Wells Fargo accused of scam involving racketeering, synthetic identity fraud

Wells Fargo has been hit with a putative class action alleging that they worked with a credit reporting agency that they co-own to use fake and real personal-identification information to open unauthorized accounts, according to The Mercury News.

The bank is accused of violating United States anti-racketeering laws.

Bernard Patterson, a forensic accountant and certified fraud examiner, filed the lawsuit this month, accusing Wells Fargo of creating thousands of fraudulent accounts after he began receiving a checking account statement from the bank despite his having never done business with the company.

Patterson’s account was made using his real name and social-security number in combination with fake driver’s license data and a false birth date, according to the lawsuit. Mixing real but stolen identity data with manufactured data to carry out fraud is known as synthetic identity fraud. After opening the allegedly fraudulent accounts, Wells Fargo could obtain confidential information from credit reporting and risk management agency Early Warning.

The lawsuit alleges that the bank laundered money, using the accounts to secretly process the transfer of electronic funds. It further alleges Early Warning provided fraudulent identity verification to give the accounts the appearance of validity. Wells Fargo and Early Warning deny the claims.

Wells Fargo has had biometric authentication apps available for corporate clients since 2016. It was fined $3 billion in 2020 for creating millions of fake accounts to generate millions of dollars in fees and interest.

With scams growing more complex and frequent, over two-thirds of consumers believe their data is either not secure or “somewhat secure.”

Synthetic identity fraud is one of the fastest growing financial crimes in the world, with 68 percent of surveyed businesses reporting a year-to-year increase in occurrences, according to the Global State of Digital Identity 2023 report from GBG.

Article Topics

banking  |  financial services  |  identity verification  |  lawsuits  |  synthetic data  |  synthetic identity fraud