Wells Fargo fined $185M: Things to know

Big banks continue to get slaps on the wrist for illegal practices

Employees reportedly moved money from customers’ real accounts to the fake ones, leading to a widespread issue of overdraft fees and charges. The CFPB said bank employees may have opened as many as 1.5 million checking and savings accounts, and more than 500,000 credit cards, without customers’ authorization.

His agency fined Wells Fargo $100 million, the largest penalty it has ever imposed.

Los Angeles City Attorney Mike Feuer called the bank’s behavior “outrageous” and a “major breach of trust”.

According to Wells Fargo, leadership was aware that their employees were occasionally committing these crimes and had been firing offending employees over the last several years, apparently without informing their customers. Employees went so far as to transfer money from existing accounts to fund the new, unauthorized ones.

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

Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found.

Here is the full response from Wells Fargo.

Wells Fargo said it has refunded $2.6 million to affected customers for monthly maintenance fees, insufficient fund fees, overdraft charges and other fees paid.

The bank has 40 million retail customers.

Wells Fargo employees also created fake email addresses to enroll customers in online banking services without their knowledge.

Team 10 asked Cherin if he thinks a situation like this would have customers leaving a bank like Wells Fargo.

The company, which is the largest United States bank by market capitalization, has fired some 5,300 employees in connection with the scandal, in which workers quietly took advantage of customers in an effort to reap rewards and game an employee-incentive program.

“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us”, the bank said in a formal statement.

“At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action”, the bank said in a memo to employees and obtained by CNNMoney. These refunds are expected to total at least $2.5 million. The Wells Fargo penalty is created to send a message to the broader financial industry to discourage similar activities.