Everyone hates paying bank fees.
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When customers complained about the unwanted credit cards, the branch manager would blame a computer glitch or say the card had been requested by someone with a similar name, Estrada said.
Wells Fargo customers are shocked to learn bank employees created millions of unauthorized accounts in their names.
Consequently, bank employees temporarily transferred money into the newly-opened accounts from customer’s existing accounts, thus appearing to meet their sales targets.
Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees related to the shady behavior over the last few years.
The scope of the scandal is shocking.
The watchdog said staff funded unauthorised accounts by moving customers’ money without their consent, meaning many faced unwanted annual fees and overdraft protection charges.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. And that’s not all; the CFPB says Wells Fargo will pay back its defrauded customers.
The penalty is the largest the CFPB has imposed since it was created in 2009 on the heels of the world financial crisis. As a result, Wells Fargo has agreed to pay a fine of $185 million, the largest fine collected by the USA government’s new consumer protection agency.
Wells Fargo’s aggressive sales tactics were first disclosed by The Los Angeles Times in an investigation in 2013. Berkshire Hathaway, the investment firm run legendary investor Warren Buffett, is the company’s biggest shareholder.
In an agreement announced Thursday, the bank says it will pay $100 million to the CFPB, the largest penalty in the bureau’s history.
Wells Fargo confirmed to CNNMoney that the firings represent about 1 percent of its workforce and took place over several years.
Elizabeth Garcia, President of the Better Business Bureau of North Alabama, said often when folks see a small fee on their bank statement, they second guess themselves instead of asking questions. The leadership of John Stumpf, CEO of Wells Fargo, “led to bullet holes piercing the brand like a suicidal west gunslinger taking action”, Shiffer tells TheDCNF. Now the bank faces $185 million in fines and customers are scrambling to find out whether or not they’re victims. Such customers should begin receiving information in October, according to the office of Los Angeles City Attorney Mike Feuer.
Feuer’s office sued Wells Fargo in May 2015 over allegations of unauthorized accounts.
Already, Wells Fargo officials said the bank has hired an outside firm that has reviewed customer accounts looking for bogus accounts and that the bank has paid $2.6 million in refunds so far.
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“How does a bank that is supposed to have robust internal controls permit the creation of over a half-million dummy accounts?” asked Vladeck.
