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Wells Fargo Fined $185 Million Over Unauthorized Accounts
Wells Fargo Bank recently made the news when they were fined $185 million from several agencies for opening numerous unauthorized customer accounts. The Consumer Financial Protection Bureau (CFPB) reached a settlement with Wells Fargo, who has agreed to pay $100 million to CFPB, $50 million to the city and county of Los Angeles, and $35 million to the Office of the Comptroller of the Currency.
During a review of Wells Fargo’s sales records, CFPB discovered that bank employees were illegally opening unauthorized bank accounts and credit cards in the names of their current customers. In the Consent Order, the CFPB levied the following charges against Wells Fargo:
- Opening deposit accounts and transferring funds without authorization: According to the bank’s own analysis, employees opened roughly 1.5 million deposit accounts that may not have been authorized by consumers. Employees then transferred funds from consumers’ authorized accounts to temporarily fund the new, unauthorized accounts. This widespread practice gave the employees credit for opening the new accounts, allowing them to earn additional compensation and to meet the bank’s sales goals. Consumers, in turn, were sometimes harmed by unexpected bank charges for insufficient funds or overdraft fees due to the fact that the money had not been in their original accounts.
- Applying for credit card accounts without authorization: According to the bank’s own analysis, Wells Fargo employees applied for roughly 565,000 credit card accounts that may not have been authorized by consumers. On those unauthorized credit cards, many consumers incurred annual fees, as well as associated finance or interest charges and other fees.
- Issuing and activating debit cards without authorization: Wells Fargo employees requested and issued debit cards without consumers’ knowledge or consent, going so far as to create PINs without telling consumers.
- Creating phony email addresses to enroll consumers in online-banking services: Wells Fargo employees created phony email addresses not belonging to consumers to enroll them in online-banking services without their knowledge or consent.
Although the amount of money transferred into the unauthorized accounts was usually insignificant, the accounts themselves were subject to monthly fees and fines that reached $2.6 million, all charged to the unassuming customers. Consequently, Wells Fargo agreed to reimburse their customers for all fines tied to these phony accounts.
The bank faces costs that extend beyond the fines and refunds as they attempt to rebuild their reputation. The bank has implemented a new protocol that issues emails to all customers immediately after an account in their name is opened. In addition, they plan to prepare new training materials for employees and enhance their monitoring systems to ensure this type of grievous behavior is avoided in the future. Lastly, the bank fired 5,300 employees in connection with these fraudulent account openings.
The institutions that levied the harsh fines on Wells Fargo admitted that consumers weren’t too deeply affected because of the minimal amounts of money involved, and the fact that the employees closed these unauthorized accounts as soon as they received their bonuses. Despite the minimal damage to consumers, the damage to the reputation of Wells Fargo is by no means insignificant. Wells Fargo prides itself on its “customer first” mantra and cross-sells its wide range of available products in order to become the sole financial resource for its customers. Now the institution finds itself working overtime to try to win back their previously favorable standing.
How an Ohio Consumer Lawyer Can Help
The situation with Wells Fargo customers aptly illustrates how necessary it is for consumers to regularly check their credit reports. You can request a free credit report annually from any of the big 3 credit monitoring companies (Experian, TransUnion, and Equifax,) which enables you to keep a close eye on your credit without having to take any hits that could potentially lower your score.
If you find that your credit has been compromised because an account was opened for you without your authorization, you are entitled to justice. You may want to speak to an Ohio consumer law attorney, who can explain the steps you need to take to prove the account was unauthorized and to get the compensation or refund you deserve from the financial institution. The attorneys at Luftman, Heck & Associates have a great deal of experience in consumer law. Let us help you fight for your right to a clean credit report. Call us for a free consultation at (888) 726-3181, or send us an email at firstname.lastname@example.org.