Wells Fargo fined $185m for fake bank account scam
Fake it until you make it… unless you get caught. Employees at Wells Fargo have been found guilty of creating millions of fake bank accounts and credit card numbers over the past five years, as an unsubtle attempt to boost sales figures.
For this illegal activity, the bank has been fined $185 million, including a record $100 million by the Consumer Financial Protection Bureau (CFPB). Wells Fargo has also fired at least 5,300 employees who were involved in the shady deals, according to The New York Times.
“Wells Fargo employees secretly opened unauthorised accounts to hit sales targets and receive bonuses,” says Richard Cordray, director of the CFPB. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”
According to US regulators, the bank’s employees created more than two million accounts that “may not have been authorised by Wells Fargo customers”, and then secretly transferred funds to them from authorised accounts – and therefore producing fees and other charges.
These Wells Fargo workers also decided in their infinite wisdom to create fake email accounts and PIN numbers to sign customers up for new accounts. Most of this activity wasn’t noticed or the accounts and numbers were closed shortly after opening. This allowed the employees to earn extra compensation and meet their sales targets.
Wells Fargo has agreed to pay $2.6 million to refund fees that were charged, according to The New York Times.
“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us,” the bank says. “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.”
In terms of the 5,300 employees, it appears that bank managers were among those who were fired, but a Wells Fargo spokesperson declined to tell The New York Times if any senior-level executives were fired or implicated.