“Consumers must be able to trust their banks”.
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Moving forward, Cherin has this advice for consumers: “When you get your bank statement, take a pretty careful look at it”. “This extraordinary resolution sends a strong message – to big banks and consumers alike – that we’ll be vigilant in protecting consumer rights”.
“Today’s enforcement actions against Wells Fargo likely could have been prevented if the bank had a stronger compliance risk-management program that fostered a more healthy culture, in which incentives aligned behaviors properly”, he said. This resulted in the bank earning unwarranted fees not to mention employees boosting their sales figures and consequently earning higher pay checks.
About 5,300 Wells Fargo workers, representing roughly 1% of the total workforce, have lost their jobs over their involvement with the unauthorized accounts.
Employees at Wells Fargo have apparently been frequently creating dummy accounts for current customers, transferring funds from the original account to the dummy count so that customers would overdraw and incur additional fees. Because money was removed from customers accounts they were charged for overdraft fees or fees for insufficient funds.
Employees involved also applied for 565,000 credit cards without proper authorization. In addition, bank employees issued and activated debit cards without consumers’ knowledge and created phony email addresses to enroll consumers in online-banking services, according to the CFPB.
“Wells Fargo is committed to putting our customers’ interests first 100% of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request”, the bank said in a statement.
Those 5,300 employees were fired upon discovery of the scheme.
Wells Fargo has also refunded $2.5 million to customers and agreed to hire an independent consultant to review its procedures.
The CFPB reported Wells Fargo employees opened an astounding 1.5 million deposit accounts. Feuer’s suit caught the attention of federal regulators, who conducted their own investigations.
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“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed”, said CFPB Director Richard Cordray.
