Wells Fargo Fires 5,300 Employees For Scandal That Defrauded Millions Of Its Customers

The bank will pay the CFPB over $185 million in fines.

One of the largest banks in the world and the third largest bank in the US, Wells Fargo, has become embroiled in a scandal so enormous that even CNN called the scope of the scandal “shocking.” Last Thursday, the bank, which has over 70 million customers and is the country’s largest mortgage lender, was fined $185 million for defrauding customers of over $5 million. This includes a $100-million fine from the Consumer Financial Protection Bureau, the largest fine the organization has ever issued. According to federal regulators, Wells Fargo employees had been engaged since 2011 in pervasive fraud which included opening credit cards and other accounts without customer consent, causing the accumulation of late fees on accounts customers never knew they had, and creating fake email accounts to sign up customers for online banking services. Wells Fargo employees ultimately opened 1.5 million “ghost” bank accounts and “applied” for over 565,000 credits in the name’s of bank customers that did not authorize them.

In some cases, fraudulent PIN numbers were created and fake email addresses were used to enroll customer in banking services without their consent. In what had apparently become a “widespread practice” at the bank, employees then moved funds from customers’ existing accounts into the fake accounts without their consent. Many customers were charged for insufficient funds or overdraft fees because of the money illegally moved out of their original accounts. Some accounts incurred as much as $400,000 in fees. Numerous customers were also charged for annual fees and interest charges as well as other fees for credit cards taken out in their name without their knowledge by Wells Fargo employees.

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