Again? Wells Fargo Fined $100 Million for Creating Fake Accounts
The CFPB fines Wells Fargo, again — this time for opening unauthorized deposit and credit card accounts.
The agency fined the bank $100 million after employees opened “more than two million deposit and credit card accounts” unbeknownst to borrowers, racking up fees and charges, the CFPB said in a statement. Wells Fargo is also required to pay $2.5 million in customer refunds.
According to an internal analysis conducted by the bank, employees opened 1.5 million deposit accounts and 565,000 credit card accounts, issued debit cards and enrolled customers to online banking without consent, for bonuses and meeting sales goals.
“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” said CFPB Director Richard Cordray. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”
This is strike two for Wells Fargo from the CFPB which alleged that the bank indulged in illegal student loan practices by charging consumers illegal fees, not reporting credit score information accurately and a failure to provide adequate disclosures for payment information. The bank agreed to settle the case for $4 million.
Last modified: October 11, 2016