Wells Fargo was hit with the largest penalty to date from the Consumer Financial Protection Bureau (CFPB) on September 8, 2016, to the tune of $100 million. The national bank, with assets over $10 billion, was fined for widespread illegal practices, including opening up over 2 million fake consumer accounts, transferring customers’ money into these fraudulent accounts without their consent, applying for credit card accounts without authorization, issuing and activating debit cards—even creating PINs without notifying customers—and setting up phony email accounts to enroll customers in online banking services. As a result, many customers were hit with insufficient funds or overdraft fees because money was not in their original accounts.
Thousands of Wells Fargo employees engaged in the scam to cash in on the bank’s compensation incentive programs and to meet sales targets. Some 5,300 employees lost their jobs over the debacle. On September 13, 2016, the banking giant announced they would eliminate all product sales goals for their retail bankers, beginning January 1, 2017.
In addition to paying $100 million to the CFPB, Wells Fargo will also have to pay another $85 million in penalties to the Office of the Comptroller of the Currency and the City and County of Los Angeles. Customers affected by the scheme will be refunded through the $5 million set aside for this purpose. Check out Wells Fargo BCA Reputation Report for more information on the consent order and to read customer reviews and complaints.
Consumer Tips
Minding your money is very important. Banking customers do well to check their accounts frequently for any unauthorized or suspicious activity. Checking your transaction history can tip you off to a problem. Don’t overlook small transactions either as they can become big financial nightmares if they turn out to be fraudulent. Contact your bank immediately if something looks amiss. If you are solicited to add on products or services to an existing account, obtain all the information in writing to review carefully before making a decision. BCA also suggests that everyone monitor their credit report. By checking your credit report you can see any accounts listed in your name and identify those you may not have authorized.
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About Business Consumer Alliance
Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.