“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses”, CFPB Director Richard Cordray said in a statement.
Advertisement
Wells Fargo confirmed to CNNMoney that it had fired as many as 5,300 employees in the last few years in relation to these practices.
The scope of the scandal is shocking.
Wells Fargo will pay $US185 million ($240 million) to resolve claims that bank employees opened deposit and credit-card accounts without customers’ approval to satisfy sales goals and earn financial rewards, USA regulators said.
According to the Consumer Financial Protection Bureau, beginning in 2011, thousands of Wells Fargo employees forged customer signatures of paperwork so that money could be moved out of the existing legitimate checking and savings accounts into new, unauthorized ones.
Workers created more than 1.5 million fake bank deposit accounts and an additional 565,000 phoney credit card accounts.
It is the largest fine the CFPB has levied against a financial institution, and it is the largest fine in the history of the Los Angeles City Attorney’s Office. Customers accumulating late fees on accounts they never even knew they had. Wells Fargo also refunded .5 million to customers, and the damage to consumer confidence could have immeasurable consequences. “If I were a Wells Fargo customer, and fortunately I am not, I’d think seriously about finding a new bank”.
The bank has been fined $185 million in fines and civil penalties by city, county and federal authorities.
Those 5,300 employees were fired upon discovery of the scheme. Numerous transfers came with fees or other charges that were paid by customers, but the lenders employees were able to meet incentive goals.
Wells Fargo said in a statement that it regretted and took responsibility for the unauthorized accounts.
Wells Fargo has the third largest deposit market share in Alabama with 9.76 percent of all deposits, according to data from the Federal Deposit Insurance Corporation, behind only Regions Bank and Compass Bank. Adding insult to injury, the illegal employee behavior was often unprofitable for the Wells Fargo.
The bank said that as a result of an independent review, customers had already been refunded $2.6m in unwarranted fees.
Advertisement
As of 2015, Wells Fargo is the second-largest banking institution in New Jersey, behind Bank of America, with an 11.57 percent deposit market share and almost 300 offices, according to the Federal Deposit Insurance Corporation.
