Thousands of Wells Fargo Bank workers spurred by aggressive sales goals opened about 2 million accounts for consumers without their permission, transferring funds from authorized accounts and often racking up fees or other charges for customers.
Wells Fargo will pay restitution to victims and a $100 million fine to the Consumer Financial Protection Bureau’s Civil Penalty Fund. The fund can be used for consumer education and financial-literacy programs, as well as to compensate victims in other cases who haven’t received full compensation for harm done to them.
The bank will also pay a $35 million penalty to the Office of the Comptroller of the Currency, and $50 million to the City of Los Angeles and Los Angeles County.
“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” Richard Cordray, director of the bureau, said Thursday. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed.”
Cordray said the agency’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.
Wells Fargo fired about 5,300 employees during the bureau’s investigation.
The company apologized for any cases where customers may have received a product that they didn’t request. However, it didn’t admit any wrongdoing related to the investigations and charges.
Wells Fargo’s violations include:
- Opening deposit accounts and transferring funds without authorization.
- Applying for credit card accounts without authorization.
- Issuing and activating debit cards without authorization.
- Creating phony email addresses to enroll consumers in online-banking services.