The following is an excerpt from Maggie McGarth | September 8, 2016 | Forbes.com |
In 2015, the city of Los Angeles sued Wells Fargo WFC +0.26% for unethical customer conduct, accusing the bank of secretly opening unauthorized accounts that then accrued bogus fees. One year later, Wells is paying for this behavior: the bank announced Thursday that it has reached settlements with city and federal officials totaling nearly $200 million.
Wells Fargo said Thursday that it has reached agreements with the Consumer Financial Protection Bureau (CFPB), the office of the Comptroller of the Currency and the Los Angeles attorney office over allegations that it, among other improper activities, opened deposit accounts and transferred funds without customers’ consent. The bank will pay a total of $185 million in fines, plus another $5 million in what it is calling “customer remediation.”
A consent decree released by the CFPB Thursday reveals the lengths to which thousands of Wells employees went in order to meet sales quotas. The CFPB investigation determined that, going back to “at least” 2011, Wells opened deposit accounts for existing customers without their knowledge or consent and proceeded to transfer money to those accounts from their other accounts; submitted credit card applications in customers’ names, also without their knowledge or consent; enrolled people in online banking services they did not ask for, in some cases using email addresses that the customers themselves did not create; and ordered and activated debit cards — and PIN numbers — using consumers’ information without their knowledge or approval.
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