In what can only be described as stunning news, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts — without their customers knowing it — since 2011. The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.
Employees Opened Unauthorized Accounts
As reported by Money CNN, the scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up over 1.5 million deposit accounts that may not have been authorized, according to the CFPB.
The way it worked was that employees moved funds from customers’ existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as “widespread” and led to customers being charged for insufficient funds or overdraft fees — because the money was not in their original accounts.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges, and overdraft-protection fees.
Largest CFPB Fine in History
The Consumer Financial Protection Bureau (CFPB) has issued the largest fine in its history to Wells Fargo in the total amount of $185 million dollars. The full text of the CFPB’s Consent Order can be found here.
Additionally, Wells Fargo has stated that it has fired 5,300 employees over this scheme. In addition to Wells Fargo customers being charged for fictitious fees on accounts that they did not know were opened in their name, they may have also been collected on these for these fictitious accounts that they never opened and these accounts may also be shown with derogatory information on their credit reports.
If you have been the victim of this type of shady dealing from Wells Fargo and if you have suspected your account was overcharged or if you were charged for a Wells Fargo account either by collections or a lawsuit that you did not think you even owed, please contact our office and set up a free consultation appointment so that we can help you figure out the best course of action. Also, if you believe that your credit has been impacted by Wells Fargo for these illegal dealings, please read this blog post to figure out what your credit looks like and the best approach to get it corrected if you have been one of Wells Fargo’s victims.