If you’re a Wells Fargo bank customer you should start gathering your past bank records. It has been revealed that workers at the banking giant have been manipulating depositor’s money and accounts. A federal investigation revealed that employees of Wells Fargo across the country have been illegally opening new accounts that include checking, savings and credit cards without a customer’s permission or knowledge. According to Richard Cordray, director of the Consumer Financial Protection Bureau, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses.”
This includes transferring money from existing accounts to the new fraudulent accounts, resulting in overdraft fees that garnered the bank $400K in profit each year. Wells Fargo Bank is the country’s biggest bank worth close to $250 billion and is owned by Warren Buffett, one of the most successful businessmen in America and the world.
It has been revealed that 5,300 employees have been fired for creating more than two million phony accounts. The scheme allowed the employees to increase their sales figures and make more money with raises and incentives. Bank employees created phony PIN numbers and fake email addresses to enroll customers in online banking services and move money. Customers were charged for insufficient funds or overdraft fees, because the money was stolen from their original accounts. Wells Fargo employees also submitted applications for 565,443 credit card accounts without customers’ knowledge or consent. At least 14Kof those accounts incurred over $400K in fees, including annual fees, interest charges and overdraft-protection fees.
Wells Fargo stated, “We regret and take responsibility for any instances where customers may have received a product that they did not request.”
The bank must know pay $185 million in fines and reimburse customers at least $5 million. The money breaks down as follows:
- $100 million CFPB’s Civil Penalty Fund,
- $35 million Office of the Comptroller of the Currency
- $50 million will be paid to the City and County of Los Angeles.
The scheme seems to have started in 2011 and the 5,300 employees were fired over the years. Wells Fargo has not commented on when they hired an auditor and became aware of the issue. In 2015, a lawsuit was filed by a Los Angeles law firm for a customer. After filing the suit, the firm received more than 1K calls and emails from customers. They also were contacted by current and former Wells Fargo employees about the allegations. Critics are stating that fines leveled against the bank are not enough and the scope of the impact to customers is still unknown. Wells Fargo issued the following statement for customers who night be affected: