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5,300 Wells Fargo Employees Fired Over 2 Million Phony Accounts
You should be able to trust your bank, right? According to CNN Money, Wells Fargo employees attempted to meet sales goals and boost their income by creating unauthorized accounts and applying for credit cards on behalf of their customers — without their authorization:
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.
[...] Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.
The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.
The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent, regulators say. The CFPB described this practice as "widespread." Customers were being charged for insufficient funds or overdraft fees -- because there wasn't enough money in their original accounts.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers' knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.
The CFPB said Wells Fargo will pay "full restitutions to all victims."
[Continues...]
The story goes on to report that Wells Fargo has so far fired over 5,300 employees and will pay a total of $185 million in fines in addition to restitution:
Of the total fines, $100 million will go toward the CFPB's Civil Penalty Fund, $35 million will go to the Office of the Comptroller of the Currency, and another $50 million will be paid to the City and County of Los Angeles.
"One wonders whether (the CFPB) penalty of $100 million is enough," said David Vladeck, a Georgetown University law professor and former director of the Federal Trade Commission's Bureau of Consumer Protection. "It sounds like a big number, but for a bank the size of Wells Fargo, it isn't really."
[...] "How does a bank that is supposed to have robust internal controls permit the creation of over a half-million dummy accounts?" asked Vladeck. "If I were a Wells Fargo customer, and fortunately I am not, I'd think seriously about finding a new bank."
Anyone with a Wells Fargo account should carefully check their statements to see if they were affected and are eligible for restitution.
Wells Fargo Fined $185 Million for Improper Account Openings
California and federal regulators fined Wells Fargo a combined $185 million on Thursday, alleging the bank's employees illegally opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals.
The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.
It is the largest fine the CFPB has levied against a financial institution and the largest fine in the history of the Los Angeles City Attorney's office.
The CFPB said Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers. Money in customers' accounts was transferred to these new accounts without authorization. Debit cards were issued and activated, as well as PINs created, without telling customers.
In some cases, Wells Fargo employees even created fake email addresses to sign up customers for online banking services.
"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully," said CFPB Director Richard Cordray.
The behavior was widespread, the CFPB and other regulators said, involving thousands of Wells Fargo employees.
Los Angeles City Attorney Mike Feuer called Wells Fargo's behavior "outrageous" and a "major breach of trust."
"Consumers must be able to trust their banks," Feuer said.
Same story posted on a multitude of news outlets, with little difference between them.
If you do business with Wells Fraudgo, you might want to reconsider. Then again, millions of Americans still do business with the worst offenders from the 2008 economic meltdown.
(Score: 1, Informative) by Anonymous Coward on Sunday September 11 2016, @08:34PM
If you travel a great deal, a multi-national gives a degree of peace of mind that what ever shithole I find myself in, I will have the means to extricate myself from an emergency with minimal fuss. Adoption of something like bitcoin may change this in the future, but for right now it is the easiest way to have access without a ton of planning beforehand. Maria Bamford has this bit about the sense of relief of seeing the sign of a corporation in the wild, and even though she meant it differently, it isn't far from the truth.
Also, pragmatically, large institutions really aren't going anywhere even with the entire economy going to shit. They will be bailed out at nearly any cost to maintain the power structure, and I'd rather bet my odds with the elites than the plebes.
Nationalization of the banks really isn't a bad thing per se, it's more a question of how they function. I'm a fan of the idea of public banking and public money, but you do need a government complimentary to it.
What we have now is closer to kleptocracy.
(Score: 0) by Anonymous Coward on Sunday September 11 2016, @08:53PM
Credit unions have banded together to make it a lot easier to do business with them from afar: https://co-opcreditunions.org/locator/ [co-opcreditunions.org]
I'm not sure if that is going to be much help internationally, but the concept is there.
(Score: 0) by Anonymous Coward on Monday September 12 2016, @12:37AM
You think Chase Manhattan Bank in Absurdistan is going to be at all impressed that you have a checking account with Chase Manhattan Retail Banking in Bumfuck NC?
(Score: 0) by Anonymous Coward on Monday September 12 2016, @02:32PM
If you travel a great deal, a multi-national gives a degree of peace of mind that what ever shithole I find myself in, I will have the means to extricate myself from an emergency with minimal fuss.
Sorry, I'm not a US resident, but how would your multi-national be better than a credit union? If you have web access can't you do banking transactions anywhere around the world? For payment stuff there's credit cards. Where credit cards don't work, cash works.
What magic stuff do multinationals do that credit unions don't?
Those multi-national banks are all about cutting costs, not helping you. My mom recently tried calling Citibank phone support to get her credit card activated, they made her jump through various hoops (somehow they knew her name by her phone but said her phone number is not in their system that's why she had to jump through some hoops), then they told her to create an online account and her card still isn't activated. Not much help there.