In addition to the penalties, Wells Fargo has also agreed to pay full restitution, totaling about $2.5 million, to all its customers whose identities and money were involved in the scam.
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“Wells Fargo employees secretly opened unauthorised accounts to hit sales targets and receive bonuses”, said Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), who said the widespread practice was motivated by a driven Wells money-making culture.
Wells Fargo said it is now sending its customers written confirmations related to new deposit accounts and credit card applications.
A Wells Fargo spokeswoman said about 5,000 managers and employees were fired for their actions, representing about 1 percent of the 100,000 people who worked in their branches over the five-year period involved.
“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us”, a company statement reads.
“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed”, Cordray said. Share your comments below or on our Facebook page. Back in May of 2015, the Los Angeles City Attorney filed a suit claiming that Wells Fargo pressured their employees to open accounts for people that aren’t real, among other ok’ed fraudulent activity. “In rare situations when a customer tells us they did not request a product they have, our practice is to close it and refund any associated fees”.
Ms. Hall, who voiced concern with the Committee for Better Banks, a group comprising mainly financial-industry employees working toward fair banking practices, now is employed as a teller manager for the US unit of Spanish bank Banco Santander SA. Ms. Stevens said she told bank employees she didn’t want the smaller credit line; the bank told her in a February letter she had signed forms allowing it to open the line at a lower amount than she preferred. They then transferred funds from consumers’ authorized accounts to temporarily fund the new, unauthorized accounts. Employees went so far as to issue fake debit cards and activated them with fake pins.
Some customers noticed the deception when they were charged unexpected fees, received credit or debit cards in the mail that they did not request, or started hearing from debt collectors about accounts they did not recognize.
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Wells Fargo will also pay an additional $35 million penalty to the U.S. Office of the Comptroller of the Currency, and another $50 million to the city of Los Angeles and Los Angeles County. However, at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action. Wells Fargo has earned a reputation on Wall Street as a tightly run ship that avoided numerous missteps of the mortgage crisis because it took fewer risks than many of its competitors.
