If you’re a Wells Fargo client you already know that one doozy of a bank outage happened last Thursday.
Those customers who wanted to use an ATM, buy something with a debit card or pay their bills online were left in limbo after a data-center fire knocked the nation’s third-largest bank off its pins.
Consumers were, understandably, more than a little ticked off.
Imagine needing gas to get to work but your debit card won’t function. How embarrassing to have to tell the babysitter you don’t have enough cash to pay in full.
The system was back up by late Thursday, although some users reported issues the next day. Among those issues was direct deposit of paychecks. Good times!
The bank promised to pay any Wells Fargo fees resulting from the outage. Whereupon one super-irate customer tweeted about an upcoming appointment to sign mortgage documents. Trouble was, at that moment the lender could not access the system to generate those documents.
“If I can’t close on my house and the seller defaults me, then what? U giving me my $45k earnest $ back?” the would-be buyer asked.
All in all, an unsettling situation, especially for paranoid dweebs like me. My initial thought was, “Data-center fire, huh? Or was it a trial run by hackers planning to bring down the country by bringing down the banks?”
I bet I’m not the only one who thought that.
Other consumers were stressed more by “the thin financial margins” in their lives, according to Matt Schulz of CompareCards.com. He told CBS News that even temporary blips can have serious impact.
“(When) there’s a hiccup in the form of a medical emergency, job loss, government shutdown or even a technical snafu at the bank that hits their bottom line, it doesn’t take much to cause real problems,” Schulz said.
Should a bank outage strike your financial institution, here are some things you need to know, and to do.
When a bank outage happens
Check your balance. Even if you can’t access the account online, you might be able to get some basic info from the bank’s customer service number. Expect what they call “higher than normal call volume,” though.
Or visit a branch in person to ask, if you’re nervous about your funds. And maybe you should be, since…
Fraud happens. Scammers are an inventive bunch. Ever get those shotgun-approach e-mails claiming to be from Bank X, warning you that your account has been compromised? I got one last week from a bank that I’ve never used and that in fact doesn’t even operate in Alaska.
Obviously you should not respond at all to e-mails and hang up on bogus phone calls. However, if you’re feeling jumpy you can call or visit the bank, as suggested above. Once all systems are go once more, check your account to make sure that no unauthorized transactions took place during the down period.
After all, when customer service is overwhelmed by frantic calls it might be a little easier for a scammer to pretend to be you. This is especially true if this person is a relative or friend who somehow gained access to your account number and might know a few details such as the hospital where you were born or the the first name of your maternal grandmother.
Speaking of which, you should…
Use unguessable passwords. People still do use passwords like 1234567, abc123, their spouse’s name or the name of their gaming avatar. Or they write passwords down on desk blotters or Post-It notes stuck on their computers.
You’d think we would know better, but apparently we don’t.
This NerdWallet article offers tips on creating strong passwords that are tough for even those close to you to guess.
Oh, and if your bank requires security questions, consider setting up incorrect answers. For example, you might give a fake name for the street where you grew up or make your maternal grandmother’s first name your private nickname for her (“Granny G” rather than “Gertrude”). Just make sure it’s something you will remember.
Things to do BEFORE a bank outage
Get yourself a cash cache. Suppose you’re out of toilet paper or cat food or milk and your only debit and credit cards are from [Crashed Bank]. How you gonna pay? With cash, that’s how. It might not be easy to create a cash cache in addition to your emergency fund, but boy, is it a good idea.
(Note: I’ve turned the “Challenge Yourself to Save” chapter from my first book into a free Google Doc. It contains more than 30 ways to find “extra” money out of even the tightest of budgets. Use some – or all! – of them to build a cash cache and boost that EF.)
Diversify your payment options. As noted above, having both debit and credit cards from the same bank is risky if something goes wrong. Get at least one other card, and use it every so often; if you’re not sure you’ll remember to do that, then put a recurring charge on it, such as a utility bill.
(Pro tip: Don’t get plain vanilla plastic. Do some research on which rewards credit cards would best suit your personal needs.)
Build social capital. Talk with relatives or friends about ways to have one another’s backs. If another bank outage happens you might need to borrow $20 for gas, so know who you’d ask. Or let folks know if you could pay for need-it-now stuff until the issue gets straightened out.
Stay calm. Yes, a bank outage will be a terrible nuisance and, if you’re like me, could initiate absolute fear that the monetary system is goin’ down.
It might require some cleanup. That could be as simple as requesting the bank reimburse you for the out-of-network ATM fee you paid, and as annoying as having to follow up should that reimbursement not happen.
Or suppose that Outage Day was the latest you could pay a bill online and have it credit in time. If so, you’ll need to contact customer service to explain that the bill was late because of a bank outage; after that, you need to watch your statement to make sure that a late fee didn’t appear anyway.
Annoying, yes, but it’s not the end of the world. It’s just a pain in your keister. Be as ready as you can be, and remember that this too shall pass.
Readers: Were you affected by the Wells Fargo outage and if so, how has that shaken down?
Nope, you weren’t the only one who thought of hackers causing the Wells Fargo issue. My first thought was of a cyber attack. But then I’m kind of a suspicious critter anyway. LOL
No, I wasn’t, thank goodness! I used to have a cash cache of $100 – $200. *sigh* I simply can’t afford to do that any more. Fortunately, I have two major credit cards that were not issued by my credit union. If I really needed them to pay bills, buy food, gas, etc., at least I’ve got ’em.
As for hackers successfully attacking the banking system, I don’t EVEN want to think about it. *shudders*
I need advice on where to invest my first $500 in a safe place that will gain interest, but not put me at risk for a loss. I’m on disability, will be 64 in 2 days & an IRA is not realistic for me. Also, all the 401K funds were spent getting to disability. I was thinking a CD & rates & banks & terms are a little confusing but I’m learning. I no longer pay taxes (yes, my income is THAT low). I do already have an emergency fund & save regularly. I’m to the point where I will be soaking my own beans too & using my crockpot daily. Thanks for the help.
You may want to check into some of the “brokers” like Charles Schwab…Some of their money market account rates are very good…like 2.38%…and the funds are liquid. Unsure of the minimums or your situation…but may want to give this some thought.
My local credit union, America First, has an offer right now of 3% on a six to eleven month CD, which is insured up to $250K. I haven’t seen a rate like that for a while and transferred what I felt comfortable of my emergency fund into it. The money market account where it has been saved was earning .65%.
Elsewhere in the comments I suggested writing to Liz Weston:
http://asklizweston.com/contact-liz/ask-liz/
I’ve recently moved funds to Ally Bank, which is offering 2.2 percent interest on savings. This is online, so you’d have to attach it to an existing bank account in order to get the money if you need it.
Congratulations on setting aside $500. My daughter was on disability for a time, and I know how straitened your circumstances probably are right now.
First I heard of this outage. In this neck of the woods Wells Fargo’s reputation is somewhat…”tarnished”…I’m not a fan of Wells or Bank of America…
We do not deal with that bank but we had a similar issue happen with our local credit union here and when you do not have access to funds it can be very frustrating to say the least. Like Cheryl, I would love to see any investment advice that you would be willing to share with us. It is also intimidating and confusing but I need to get started soon. I worry about calling up some of these bigger companies and thinking they are only in it for the profit and would not have my best interest at heart. I have been diligently watching for you or Abby to do a piece about this or share a good suggestion on where to start.
I do not give investment advice because I’m not a financial advisor. However, I will say that I use Vanguard both for my SEP-IRA through my business and my Roth IRA. That’s also where I moved my 401(k) from my newspapering days.
This article from Liz Weston explains some common red flags:
https://www.seattletimes.com/business/liz-weston-what-good-financial-advice-looks-like/
If you have additional questions, write to her directly at http://asklizweston.com/contact-liz/ask-liz/.
Thanks donna!
Yes, my husband’s paycheck is direct deposited into Wells Fargo, and there was a delay. This is exactly why we don’t have our bills set up for automatic payment. At least we can control when we pay our bills when “Murphy” stops by for a visit. (I had the misfortune, some years back, of working for a company that didn’t get their direct deposits in on time, and watched the chaos of coworkers whose automatic payments didn’t happen.) And we thought technology would make our lives easier…
Hoo boy. Technology is wonderful…when it works. Glad that no NSF fees were generated.
My local credit union, America First, has an offer right now of 3% on a six to eleven month CD, which is insured up to $250K. I haven’t seen a rate like that for a while and transferred what I felt comfortable of my emergency fund into it. The money market account where it has been saved was earning .65%.
Nice. I’m getting 3.27 percent but it’s for a longer term. Definitely would take advantage of that if I had the opportunity.
Also thought a data breach or hackers that lead to the whole bank being shut down and funny enough yesterday I was listening to NPR about how Sweden is seeing more and more businesses going to a cashless system certain restaurants don’t accept cash or coins. Not only do I think that sucks for people who are disabled, unbanked and/or poor but I also wondered about data breaches like this Wells Fargo thing. On the other hand I rarely carry cash only if I know im going to make a purchase whereas my boyfriend uses almost exclusively cash only and pays his bills cell phone and car insurance in person! gasp and anything he wants online he give me the cash and I use my debit card. Something to think about!
I always have cash, in case of even temporary shutdowns. For example, while visiting my daughter in Phoenix I walked to the Wendy’s to do some work (free wi-fi! free soft drinks for seniors who order food!). Was planning to use a discounted gift card but was told they could take cash only because a nearby construction had accidentally cut a cable and their system could no longer communicate with the credit/debit/gift card genies.
Fine by me. I used cash. However, several other people heard that and turned around and left.
Fun fact: It is cheaper for me to buy a baked potato and get a free soft drink than it is to buy the smallest soft drink available at Wendy’s. So yeah, I get the spud — and in doing so, get out of my daughter’s hair for a while.
P.S. By using cash only, your sweetheart is possibly doing himself out of a good credit score. Like it or not, it’s the system in which we live and a savvy consumer will learn to operate within that system.
The cash cache is a good idea. I never thought of it for a data center fire, but it’s part of our natural disaster (e.g., hurricane, earthquake) preparedness plan.
It’s also a good idea to include a lot of small bills as part of the cache. If you only have hundreds, and need to buy a case of water, you may end up paying $100 for a case of water.
Oh, and if your bank requires security questions, consider setting up incorrect answers.
I’ve been doing this for years! I recommend a tool like “KeePass” – you can create entries for every login/password combination you have – along with saving your security questions *and* answers. The tool encrypts the database and the database is stored on your local drive – not in the cloud.
I feel like a Luddite for saying this, but….The cloud makes me nervous.
The cloud also makes me nervous.
I work in computers (ironically, mostly in the cloud) and the cloud makes me nervous.