California and federal regulators today fined Wells Fargo Bank (WFC), one of the USA largest banks, $185 million in civil penalties to resolve claims that bank employees secretly opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals. 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.
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The bank agreed to pay full restitution to all victims and a $100 million fine to the Consumer Financial Protection Bureau’s civil penalty fund – the largest in the regulator’s five-year operating history.
Wells Fargo confirmed on Thursday that it had fired 5,300 employees related to the illegal accounts that had been opening since 2011.
Still, Wells Fargo fired more than 5,000 employees due to their alleged wrongdoing.
“We also have made improvements to our sales practices, enhanced our training, and made significant investments in monitoring and controls to further ensure customers receive only the products they want”, he added. Share your comments below or on our Facebook page.
The bank said that the deal this week settles the “allegations that some of its retail customers received products and services that they did not request”.
Wells Fargo has said that money will automatically be put back into the bank accounts of anyone affected. The company will now pay a $185 fine to CFPB and $5 million in refunds to customers. The CFPB estimates that employees also applied for roughly 565,000 unauthorized credit card accounts, on which many consumers incurred annual fees and associated finance charges.
“In 2016, Wells Fargo ranked 7th on the Forbes Magazine Global 2000 list of largest public companies in the world and ranked 27th on the Forbes 500 list of largest companies in the United States, according to Fortune 500 (2016)”. They should never be taken advantage of by their banks.
One of America’s biggest banks issued an apology along with a $190 million payout over a widespread fraud involving more than 5,000 bonus-chasing employees to create phony credit and checking accounts.
The misconduct at Wells Fargo was widespread nationwide across its network. Overdraft fees for a transfer you didn’t approve to an account you didn’t know existed?
Wells said the employees who were terminated included managers and other workers. The bank said the outside review was finalized before the settlements. “Customers must be able to trust their banks”. Sandbagging meant employees would fail to open accounts requested by customers and instead accumulate a number of account applications to be opened on a later day.
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Wells Fargo agreed to hire an independent consultant to oversee its procedures. “If I were a Wells Fargo customer, and fortunately I am not, I’d think seriously about finding a new bank”.
