Security & Fraud

Wells Fargo Faces Scrutiny Over New Data Breach

Wells Fargo, reeling from a fake account scandal, is facing more regulation scrutiny due to the unauthorized release of client data on tens of thousands of bank accounts.

According to a new report, the information accessed by a lawyer was on wealthy customers who do business with Wells Fargo’s brokerage unit. A person with knowledge of the matter told The Globe and Mail that regulators are inquiring about the data breach after information was given by accident to an attorney as part of a lawsuit involving two brothers, one of which is a former employee.

Wells Fargo has come to the determination the accounts were from a branch of the brokerage in the northeastern part of the U.S. The report went on to note that officials from the Financial Industry Regulatory Authority informally reached out to one or more of the attorneys involved in the lawsuit to find out how the cybersecurity breach happened and how Wells Fargo found out. The bank’s lawyers are contacting the regulators about the data breach as well, noted the report.

“Wells Fargo takes the security and privacy of our customers’ information very seriously,” the banking firm said in a statement according to the report. “We are currently taking legal action to ensure the additional data is not disseminated, and we are requesting its rapid return. We continue to thoroughly investigate this matter and will take the proper steps, including corrective action, based on the outcome of our investigation.”

The latest cybersecurity breach comes less than a year after the company was hit with a scandal in which Wells Fargo employees had been opening a slew of fake accounts in its retail banking units without permission. That resulted in a record fine, the ousting of key executives, including the CEOm and an overhaul of the corporate culture at the company. The scandal has also hurt the bank’s reputation and its stock price.


Featured PYMNTS Study:

More than 63 percent of merchant service providers (MSPs) want to overhaul their core payment processing systems so they can up their value-added services (VAS) game. It’s tough, though, since many of these systems date back to the pre-digital era. In the January 2020 Optimizing Merchant Services Playbook, PYMNTS unpacks what 200 MSPs say is key to delivering the VAS agenda that is critical to their success.

Click to comment