Bank employees opened about 1.5 million new accounts and applied for about 565,000 credit cards that may not have been authorized by customers, according to the CFPB.
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The Consumer Financial Protection Bureau said employees at Wells Fargo had illegally boosted sales figures by opening unauthorised deposit and credit accounts. The company will now pay a $185 fine to CFPB and $5 million in refunds to customers.
At any rate, the CFPB has assured customers that Wells Fargo will pay “full restitution to all victims”, which amounts to $185 million in fines and $5 million in refunds to customers. He warned that if financial incentive programs are not monitored carefully, they may have serious risks and lead to legal consequences.
8, 2016, about the settlement of allegations against Wells Fargo over unauthorized customer accounts.
The irregularities came to light partly from a Los Angeles County Superior Court lawsuit filed previous year in which Los Angeles City attorney Mike Feuer levelled charges against the bank of violating California unfair competition laws. “The actions we have taken with respect to team members and managers reflect our commitment to monitoring and addressing any inappropriate sales conduct”. “Consumers, in turn, were sometimes harmed because the bank charged them for insufficient funds or overdraft fees because the money was not in their original accounts”.
The cash will go to regulators while the bank will also hand back $5m to customers. Some 14,000 of the credit card accounts incurred $400,000 (£300,000) in fees, including annual fees, interest charges and overdraft-protection fees, regulators discovered. Once the accounts were opened the employees transferred money to temporarily fund the new accounts which allowed them to meet sales goals and earn extra compensation.
In addition to the $100 million paid to the CFPB’s Civil Penalty Fund, Wells Fargo was required to refund all the assorted fees associated with the unauthorized accounts, estimated to be at least $2.5 million. Employees even created fake passwords and email addresses to enrol customers in online banking services for which they had not registered, said regulators.
You are urged to check your bank statements and see if you have any unexpected charges, or call your local Wells Fargo.
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Wells Fargo’s aggressive sales tactics were first disclosed by the Los Angeles Times in an investigation in 2013.
