Posted by News Express | 9 September 2016 | 1,878 times
Wells Fargo will pay a total of $185 million for illegal banking practices, the country’s Consumer Financial Protection Bureau (CFPB) announced Thursday.
Employees of the world’s biggest bank by market capitalisation opened unauthorised deposit and credit card accounts, and funded them through transfers from consumers’ authorised accounts without their knowledge or consent, according to a CFPB statement.
Wells Fargo told CNNMoney it had fired 5,300 of its employees involved in the scandal.
The illegal transfers sometimes included fees and other charges as employees tried to boost sales figures or meet sales targets in order to receive compensation incentives, the CFPB said.
“According to the bank’s own analysis, employees opened roughly 1.5 million deposit accounts that may not have been authorised by consumers ... and Wells Fargo employees applied for roughly 565,000 credit card accounts that may not have been authorized by consumers,” the statement noted.
Bank employees also created phony email addresses that did not belong to consumers in order to enroll them in online-banking services without the knowledge or consent of its customers.
“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed, CFPB Director Richard Cordray said in the statement. He warned that if financial incentive programs are not monitored carefully, they may have serious risks and lead to legal consequences.
In addition to the fine, the bank will pay an unspecified full restitution to all of its victims.
Wells Fargo is estimated to have approximately 40 million customers in retail banking.