When Wells Fargo isn’t settling for a billion dollars for perpetrating an insane amount of insurance fraud on the United States, or when they aren’t perpetuating a fraud on their customers, they are dealing with thousands (that’s three zeros) of fraudulent workers.
Under the agreement, announced Thursday by the C.F.P.B., Wells Fargo will pay a total of $185 million: a $100 million fine to the C.F.P.B.’s Civil Penalty Fund, $35 million the Office of the Comptroller of the Currency, and an additional $50 million to the City and County of Los Angeles. Richard Cordray, the bureau’s director, called it the “largest penalty the C.F.P.B. has ever imposed” because of “the severity of these violations.”
Federal regulators say that scheme, which allegedly began in 2011, involved Wells Fargo employees secretly creating millions of potentially unauthorized credit-card and bank accounts. Incentivized by rigorous sales quotas and compensation, employees transferred money from existing customer accounts to surreptitiously opened new accounts, the C.F.P.B. explained in its statement. Unaware that their balances had changed, customers were then charged overdraft fees or penalties for insufficient funds.
How many workers and how many accounts? An insane amount.
Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.
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The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.
Well, that’s that. Nope, there’s more.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers' knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.
Is $185 million enough? Not a chance. I’ll tell you this, Wells Fargo knows if you take out $20 from your bank and won’t let you near your money without all kinds of identification, so their inability to police thousands of workers and hundreds of thousands of fake accounts is either criminally negligent or willfully evil.
