Wells Fargo fined $185 million for improper account openings

[brassmonkey]

NEW YORK (AP) - California and federal regulators fined Wells Fargo a combined $185 million on Thursday, alleging the bank's employees illegally opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals.

The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.

It is the largest fine the CFPB has levied against a financial institution and the largest fine in the history of the Los Angeles City Attorney's office.

The CFPB said Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers. Money in customers' accounts was transferred to these new accounts without authorization. Debit cards were issued and activated, as well as PINs created, without telling customers.

In some cases, Wells Fargo employees even created fake email addresses to sign up customers for online banking services.

"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully," said CFPB Director Richard Cordray.

The behavior was widespread, the CFPB and other regulators said, involving thousands of Wells Fargo employees.

Los Angeles City Attorney Mike Feuer called Wells Fargo's behavior "outrageous" and a "major breach of trust."

"Consumers must be able to trust their banks," Feuer said.

Wells Fargo's aggressive sales tactics were first disclosed by The Los Angeles Times in an investigation in 2013 . The story series prompted the Los Angeles City Attorney office to sue Wells Fargo over its tactics.

Roughly 5,300 employees at Wells Fargo were fired in connection with this behavior, according to Los Angeles City Attorney's office.

In a statement, Wells Fargo said: "We regret and take responsibility for any instances where customers may have received a product that they did not request." Wells Fargo said they've refunded $2.6 million in fees associated with products that were opened without authorization.

Despite the L.A. Times investigation, Wells Fargo is still known for having aggressive sales goals for its employees. Wells Fargo's executives highlight every quarter the bank's so-called "cross sale ratio," which is the number of products the bank sells to each of their individual customers. The ratio hovers around six, which means every customer of Wells Fargo has on average six different types of products with the bank.

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[beerptrol]

what is that! A months worth of late fees? Slap on the wrist!

[brassmonkey]

Originally Posted by beerptrol

what is that! A months worth of late fees? Slap on the wrist!

the system is setup to milk them not destroy them

[Barry-xlovecam]

Banksters get caught but don't go to jail as usual.
Fiduciary

5,300 employees involved -- WTF? This scam was organized by or overlooked <wink ... wink>by the bank's branch management -- that is rather obvious.

[woj]

Originally Posted by Barry-xlovecam

Banksters get caught but don't go to jail as usual.
Fiduciary

5,300 employees involved -- WTF? This scam was organized by or overlooked <wink ... wink>by the bank's branch management -- that is rather obvious.

it's obvious indeed:

"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully," said CFPB Director Richard Cordray.

so in layman's terms, these employees were financially benefiting from each opened account... but clearly they were just innocent victims in all this...

[woj]

the logic would be not unlike affiliate program getting hit by a gang of carders...

carders got paid their affiliate commission...
affiliate program gets fined, takes all the heat and is made to appear like the bad guy... cause obviously they are shitstains who didn't monitor fraud closely enough...
while the carder is clearly just an innocent victim in all this...

[DBS.US]

Wells Fargo is not the only bank doing it.

[BIGTYMER]

That'll teach them!

[_Richard_]

Originally Posted by brassmonkey

the system is setup to milk them not destroy them

interesting insight, really

[C H R I S]

They should seriously go after them under the RICO act, this shit is criminal.

[brassmonkey]

Originally Posted by _Richard_

interesting insight, really

same old shit did you know television networks pay fines in advance so they can turn up commercial volumes? some are very loud even if you turn the volume down i learned this when i contacted the fcc. the calm act is bullshit they just pay the fines and continue.

[onwebcam]

Oh look, government agencies get money and the people harmed get nothing.

[woj]

Originally Posted by onwebcam

Oh look, government agencies get money and the people harmed get nothing.

...and the front line low level employees, the ones that actually did the deed, get to keep all their ill-gotten bonuses, they are completely unscathed... they will now likely get a job a block away at a competing bank where they'll be able to game "incentive-compensation program" for their personal gain again, while the company takes all the heat...

[RyuLion]

Originally Posted by beerptrol

what is that! A months worth of late fees? Slap on the wrist!