Wells Fargo Sets Record for Largest Fine Received From CFPB
The investigation into Wells Fargo's fraudulent sales tactics has finally reached a conclusion with the bank paying a fine of $185 million. Included in that fine is a record setting $100 million penalty issued by the Consumer Financial Protection Bureau (CFPB) against Wells Fargo.
In addition to the fines, Wells Fargo must pay back all fees charged to customers as a result of the fraudulent sales, an estimated additional $5 million. As a result of Thursday's settlement, Wells Fargo stock has started to drop as Wall Street analysts predict that customers will start leaving the bank due to the severe breach of trust.
What's This All About Anyway?
In 2013, an LA Times story broke about the shady sales culture at Wells Fargo. Employees were forced to meet quotas for selling add-on services to current customers or face possible termination. In order to meet the quotas, naturally the employees resorted to fraud. For instance, employees would open accounts for customers without getting consent, would forge customer signatures, order credit cards, and create accounts for customers that were not requested or necessary.
The 2013 story led Los Angeles City Attorney Mike Feuer to investigate the bank's practices further. What he found was that these same practices were more widespread than initially reported and had been happening since at least 2011. Over 5,000 Wells Fargo employees have been terminated since 2011 for these abusive and fraudulent sales.
What Can I Do If I Am a Wells Fargo Customer?
Wells Fargo customers can look back through all their records to see what charges they think are bogus. Unfortunately, the banking giant has not set up a specific method for customers to reach out regarding these types of claims. At this stage, you may want to contact your local branch manager or perhaps an attorney.
According to NJ.com, Wells Fargo has already paid out approximately $2.6 million to 100,000 customers (an average of $25 per customer). On their website, Wells Fargo posted a poor excuse for an apology that provides customers with no way to file a claim as a potential victim.
- Wells Fargo to pay $185 million settlement for 'outrageous' sales culture (L.A. Times)
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