According to federal regulators Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts without their customers knowing it and those phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money. Wells Fargo has confirmed that it has fired 5300 employees for their involvement with these accounts and has agreed to pay $185 million in fines, along with $5 million to refund customers. It is estimated that bank employees opened up over 1.5 million deposit accounts.
Apparently, employees moved funds from customers’ existing accounts into newly-created accounts without their knowledge or consent, regulators say. .
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Many customers who had unauthorized credit cards opened in their names were hit by annual fees, interest charges and other fees.
The $185 million is the largest penalty since the Consumer Finance Protection Bureau (CFPB) was founded in 2011.
“We regret and take responsibility for any instances where customers may have received a product that they did not request,” Wells Fargo said in a statement.
Jeffrey Newman represents whistleblowers