Circling the stagecoaches

8 Sep 2016 By Antony Currie Follow @AntonyMCurrie

The U.S. lender led by John Stumpf has undertaken one of the biggest purges of bad bankers. It fired some 5,300 employees for opening 2 mln fake customer accounts that just led to $190 mln in fines. Failure of culture, incentives and accountability isn’t limited to high finance.

This content is for Subscribers only

Context News

Wells Fargo on Sept. 8 agreed to pay $190 million to settle charges that its retail bankers illegally and secretly opened millions of unauthorized accounts to help meet sales targets. The bank will pay $100 million to the Consumer Financial Protection Bureau, $50 million to the City and County of Los Angeles, $35 million to the Office of the Comptroller of the Currency and at least $2.5 million to affected customers.

The regulators alleged that between 2011 and 2015 Wells Fargo bankers opened roughly 1.5 million deposit accounts that customers may not have authorized. They transferred funds from customers' other accounts so that they could book the activity as a sale. At times customers were then charged for having insufficient funds or even racked up overdraft fees on these accounts they did not know they had.

Over the same timeframe, bankers may have applied for some 565,000 credit cards without customers' knowledge, often causing them to be charged annual fees, late fees and interest expenses, according to the regulators. Bankers also allegedly issued debit cards and PIN numbers without customers' knowledge.

Keeping the activity hidden from clients involved creating phony email addresses to enroll them online.

Wells Fargo said, "We regret and take responsibility for any instances where customers may have received a product that they did not request." Between January 2011 and March 2016 the bank fired some 5,300 people it deemed to have been involved in falsely creating accounts.

Context News

Keeping the activity hidden from clients involved creating phony email addresses to enroll them online.

Email a friend

Please complete the form below.

Required fields *