“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed”.
Advertisement
The US’ biggest bank Wells Fargo has been fined $185m for illegally opening accounts to boost sales targets.
The investment management company now holds a total of 1,375,050 shares of Wells Fargo & Co which is valued at $65,864,895 after selling 548 shares in Wells Fargo & Co, the firm said in a disclosure report filed with the SEC on Aug 15, 2016.Wells Fargo & Co makes up approximately 4.86% of Endeavour Capital Advisors Inc’s portfolio.
The Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Los Angeles City Attorney announced the massive settlement on Thursday.
Wells said in a statement that it settled “in the interest of putting this matter behind us”.
The fake accounts were set up by bank employees to achieve sales goals and reap financial incentive rewards, and the bank fired about 5,300 employees as the result of the allegations, according to the CFPB.
Wells Fargo’s aggressive sales tactics were first disclosed by The Los Angeles Times in an investigation in 2013. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up 1,534,280 deposit accounts that may not have been authorized, according to the CFPB.
“We regret instances where customers may have received a product that they did not request”, the bank said.
Wells Fargo employees also applied for roughly 565,000 credit card accounts that may not have been authorized by consumers, the CFPB said. Money in customers’ accounts were transferred to these new accounts without authorization.
The settlement between the L.A. City Attorney and the bank also establishes a complaint and mediation system for California consumers harmed by the bank’s alleged practices.
The civil action charged that Wells Fargo & Company and Wells Fargo Bank “have victimized their customers by using pernicious and often illegal sales tactics to maintain high levels of sales of their banking and financial products”. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries and territories to support customers who conduct business in the global economy. “Consumers must be able to trust their banks”.
Wells Fargo & Company is a financial services and bank holding company.
Advertisement
Wells has a reputation for cross-selling products and services to existing customers. That was down from 6.32 in the year-earlier period in part because of recent changes in which products count toward the metric. Accounts refunded represented a fraction of one percent of the accounts reviewed, and refunds averaged $25. Customers can receive in-person assistance from 9 a.m. – 7 p.m. weekdays and 9 a.m. – 2 p.m. on Saturday through September 16.
