Wells Fargo will pay full restitution to all victims and a $100 million fine to the CFPB’s Civil Penalty Fund.
Advertisement
Money reported that federal regulators said the employees secretly created millions of bank and credit card accounts that were not authorized by customers since 2011.
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.
“Employees misused consumer names and personal information to create new checking and credit card accounts to inflate their sales figures to meet their sales targets and claim higher bonuses”, he added.
For this illegal activity, the bank has been fined $185 million, including a record $100 million by the Consumer Financial Protection Bureau (CFPB).
The San Francisco-based bank will also pay $50m to the City of Los Angeles, which had filed suit previous year, accusing the bank of pressuring employees into fraudulent behavior, such as opening fictitious accounts.
Since at least 2011, Wells Fargo employees have been creating fake accounts using customers’ identities to boost their sales numbers, federal regulators said on Thursday. Share your comments below or on our Facebook page. “The bank has accepted these charges and takes responsibility of any instance where any of its products was forced on to its customers”.
In a statement, the bureau said that while compensation programs like the one described here are common and accepted, Wells Fargo “failed to monitor the implementation of these programs with adequate care”.
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.
Customers, the bank said, have already received refunds for various charges, overdraft fees, annual fees or finance and interest charges they may have unknowingly incurred on the unauthorized accounts.
Advertisement
Cases like this always open up questions, and the Wells Fargo debacle is no different. However, the bank fired about 5,300 employees during the investigation. The average was about $25 for each account.
