The CFPB says that Wells Fargo must refund all affected consumers the sum of all monthly maintenance fees, nonsufficient fund fees, overdraft charges, and other fees they paid because of the creation of the unauthorized accounts.
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Feuer’s office says that after the suit was filed, the city attorney received “more than 1,000 phone calls and emails from customers and current and former Wells Fargo employees across the nation about the issues raised in the litigation”.
The bank has fired at least 5,300 employees who were involved in these alleged practices that have been traced as far back as 2011.
To summarize the case, the fake accounts were opened by the bank’s employees to meet their sales targets so that they could get their bonuses.
The Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $100 million for the alleged secret opening of unauthorized deposit and credit card accounts.
According to an analysis by the San Francisco-headquartered bank, its employees opened more than 2 million deposit and credit card accounts that might not have been authorised by consumers, the officials said.
The irregularities came to light partly from a Los Angeles County Superior Court lawsuit filed past year in which Los Angeles City attorney Mike Feuer levelled charges against the bank of violating California unfair competition laws.
According to the Wall Street Journal, the CFPB said Wells Fargo terminated around 5,300 employees for “engaging in the improper sales practices”.
Employees also applied for 565,000 credit cards without customer permission, also resulting in fees for customers who had no idea the card was opened in their name.
In a statement, the bank said, “Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us…”
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“While it’s the largest fine in CFPB history, it is a drop in the bucket with respect to the assets of Wells Fargo”, said Lisa Cook, an economics professor at Michigan State University. “The bank has accepted these charges and takes responsibility of any instance where any of its products was forced on to its customers”. Employees also allegedly set up fake email accounts and PIN numbers to register customers to the bank’s online banking services.
