The bureau said Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may not have been authorized by customers.
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Thousands of Wells Fargo employees opened the accounts in secret, investigators say, so they would get bonuses for hitting their sales targets.
Retail and commercial banking giant Wells Fargo & Co will pay more than US$185 million in fines after United States regulators accused the bank of secretly opening accounts without customers’ knowledge, officials said on Thursday. Mike Feuer, who filed a lawsuit against Wells Fargo past year, said, “It’s outrageous for a bank to use a customer’s private information without permission to open an unwanted account”.
“This widespread practice gave the employees credit for opening the new accounts, allowing them to earn additional compensation and to meet the bank’s sales goals”, the CFPB report said.
Wells Fargo’s aggressive sales tactics were first disclosed by The Los Angeles Times in an investigation in 2013. On the other hand, the bank has agreed to recompense all the victims of this act and has also agreed to pay a $100 million fine to the Consumer Financial Protection Bureau. Debit cards and PINs were also issued in the customer’s name. “At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action”. Employees even created fake passwords and email addresses to enrol customers in online banking services for which they had not registered, said regulators. They would take money from a customer’s real account to satisfy the requirements of the new account, which left customers vulnerable to overdraft fees and with less money in their bank account than there should have been.
According to the CFPB’s consent order, Wells Fargo has already terminated 5,300 employees involved with illegally opening the accounts. The company said in a statement that those employees have been fired. City Attorney Mike Feuer called the settlement a “major victory for consumers”.
The CFPB also said Wells Fargo will refund money to customers affected. Numerous transfers came with fees or other charges that were paid by customers, but the lenders employees were able to meet incentive goals.
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Wells Fargo’s website lists no banks in West Virginia, with only one in western Ohio. As part of the agreement with regulators, Wells Fargo will compensate customers who had to pay fees or charges to their accounts.
