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martyb [soylentnews.org] writes:

[Topics: +Business]

You should be able to trust your bank, right? According to CNN Money [cnn.com], 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."

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.

Original Submission