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Wells Fargo Fires 5,300 Employees For Creating Millions of Phony Accounts (cnn.com)

Posted by BeauHD on from the what-goes-around-comes-around dept.

An anonymous reader quotes a report from CNNMoney: Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for. That's exactly what happened to Wells Fargo customers nationwide. On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011. The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money. Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees related to the shady behavior over the last few years. 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 up over 1.5 million deposit accounts that may not have been authorized, according to the CFPB. Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers. The report says that "employees moved funds from customers' existing accounts into newly-created accounts without theier knowledge or consent," which resulted in "customers being charged for insufficient funds or overdraft fees," since their original accounts didn't contain the money. What's more is that "Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent," causing customers who had unauthorized credit cards opened in their names to be "hit by annual fees, interest charges and other fees."

4 of 341 comments (clear)

  1. Typical by Anonymous Coward · · Score: 5, Informative

    That's what they get for putting unrealistic quotas on the employees.

    1. Re:Typical by Anonymous Coward · · Score: 3, Informative

      I once bought something at Best Buy and they asked me which of their magazines I wanted, a sports one or and entertainment one. I said neither, and then was told they were free and he stuck an entertainment one in my bag. Best Buy then gave my credit card number to the magazine company which charged me $40 and began sending me the magazine to my house.

      I had to call the magazine and explain it was credit card fraud (cardholder not present for transaction is the correct wording to use there) and they could either refund the money or I would press charges. I guess I wasn't the only one that called and they refunded me immediately. Best Buy wasn't doing that next time I went in, but it took about 5 years before I would set foot in their stores after that.

    2. Re: Typical by Anonymous Coward · · Score: 2, Informative

      >>Yeah sure, and the USSR wasn't communism, etc...

      Correct, it was Leninism/Stalinism, allegedly designed to evolve into communism after creating the "dictatorship of the proletariat".

      Go read a book.

  2. "The CFPB declined... by gatfirls · · Score: 4, Informative

    .... to explain how it came up with the $100 million penalty figure."

    Ooh Ooh pick me!

    They sat down with Wells Fargo lawyers and accountants and came to an agreed upon amount.

    I don't know how people continue to bank with a place that has repeatedly been shown to do everything they can to screw their customers, it wasn't too long ago they were appealing the class action suit because they were stacking debit transactions largest to smallest to maximize overdraft revenue.