Wells Fargo ordered to refund customers for unauthorized account charges
Wells Fargo Bank will pay $185 million in penalties and $5 million to customers that regulators say were pushed into fee-generating accounts they never requested. The Consumer Financial Protection Bureau, created in response to the banking crisis...
Wells Fargo Bank will pay $185 million in penalties and $5 million to customers that regulators say were pushed into fee-generating accounts they never requested.
The Consumer Financial Protection Bureau, created in response to the banking crisis of 2007-08, will receive $100 million; Los Angeles officials and the Office of the Comptroller of the Currency were also party to the settlement.
In a complaint filed in May 2015, California prosecutors alleged that Wells Fargo pushed customers into costly financial products that they did not need or even request.
Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint.
The bank opened more than 2 million deposit and credit card accounts that may not have been authorized, the CFPB said Sept. 6.
Wells Fargo spokeswoman Mary Eshet said the bank fired 5,300 employees over "inappropriate sales conduct." The firings took place over a five-year period, Eshet said, adding the bank has 100,000 employees in its branches.
Wisconsin Sen. Janis Ringhand, D-Evansville, outlined Wells Fargo's illegal activities in a Sept. 30 column.
"Wells Fargo illegally opened new accounts and transferred funds from existing accounts in order to meet sales targets established by senior management executives. They used customer's personal information to create hundreds of thousands of unauthorized deposit and credit card accounts, going so far as to create PIN's for accounts without the consent of their customers. While senior executives then received millions of dollars in cash bonuses these illegal practices led to consumers being charged fees for insufficient funds, interest charges, annual credit card fees and other late fees."
The CFPB has ordered Wells Fargo to provide refunds to the thousands of people who incurred fees as a result of an unauthorized account.
Ringhand capped off her column in support of the CFPB with advice to consumers and contact information.
"Customers of Wells Fargo or any other bank or credit union should always monitor their accounts to make sure they don't see unauthorized products or account activity," she wrote. "If you suspect that you had an unauthorized account opened, you can submit a complaint to the CFPB, at www.consumerfinance.gov/complaint or by call toll-free 855-411-2372."
Telegram reporter Maria Lockwood contributed to this report.