Wells Fargo Pays $185MM in Fines for Opening Unauthorized Accounts

According to regulators, employees at Wells Fargo opened more than 2 million fake deposit accounts in real customers’ names and even transferred money in and out of them, without authorization, from those unsuspecting customers. Bureau officials believe sales targets and compensation incentives spurred Wells Fargo employees to boost sales figures by covertly opening accounts and moving money from customers’ authorized accounts to fund the fake accounts.

The Consumer Financial Protection Bureau slapped the bank with the fine – the largest it has ever levied – after finding these practices were rampant throughout Wells Fargo since 2011, reports The New York Times. The bank’s also paying $185 million in fines – $100 million of which will go to the CFPB.

“It is outrageous for a bank to use a customer’s private information without permission to open an unwanted account”, L.A. City Attorney Michael Feuer said.

Wells Fargo has the third largest deposit market share in Alabama with 9.76 percent of all deposits, according to data from the Federal Deposit Insurance Corporation, behind only Regions Bank and Compass Bank.

Millions of Americans were scammed by 5,300 bank employees, who reportedly secretly created unauthorized bank and credit card accounts over the past six years.

The Wall Street Journal first reported that regulators were investigating Wells Fargo’s sales culture in November.

The lawsuit has charged in blatant terms that the bank management had been aware of such activities conducted under its nose, but did very little to control the actions of its employees and protect its customers.

In a statement, the bureau said that while compensation programs like the one described here are common and accepted, Wells Fargo “failed to monitor the implementation of these programs with adequate care”.

Workers also issued and activated debit cards without consent – in some cases creating PIN numbers without telling customers – and also created phony email addresses to enroll customers in online banking, the CFPB said.

Wells Fargo has to pay out a whole lotta this. The company said in a statement that those employees have been fired.

The bank said that the deal this week settles the “allegations that some of its retail customers received products and services that they did not request”. Affected members will also get full restitution. However, at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action.

Wells agreed to hire an independent consultant to ensure its employees are properly trained.