U.S. retail and commercial banking giant Wells Fargo will pay more than $185 million in fines after United States regulators accused the bank of secretly opening accounts without customers’ knowledge, officials have said.
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Regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for drumming up new business.
Customers have reported facing fees, overdraft charges and sometimes negative effects on their credit scores as a result of these false accounts.
Wells Fargo has been hit with a $185 million fine for opening millions of unauthorized accounts in order to meet sales goals.
The Consumer Financial Protection Bureau (CFPB) announced Thursday that it had fined Wells Fargo $100 million over charges that thousands of its employees opened up secret accounts in customers’ names to boost sales numbers.
According to the New York Times, Wells Fargo was slapped with a $185 million fine for engaging in some pretty shady practices.
“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed”, Cordray said.
Wells Fargo (NYSE:WFC) has been fined almost $185 million for alleged illegal practices involving account openings.
These findings are somewhat linked to the 2015 Los Angeles Superior Court lawsuit in which the bank was accused by a Los Angeles City attorney of violating laws of unfair competition in California. According to the bank’s own analysis, employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers. They should never be taken advantage of by their banks.
Wells Fargo said in a statement that it has fired managers and employees “who acted counter to our values” in carrying out the schemes.
Wells Fargo officials told Team 10 that on an annual basis, more than 100,000 team members worked in their branches, and the number terminated represents about one percent of this workforce over the five-year period. The company also refunded $2.6 million to customers associated with the alleged fake accounts.
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Wells Fargo confirmed it had reached a settlement with the federal government and other authorities after its retail customers were signed up for products and services without their knowledge.
