Employees at Wells Fargo created millions of fake bank accounts and credit card numbers over the past five years, federal regulators announced this week, in an illegal bid to boost their sales figures. The bank was fined $185 million for the practices on Thursday, including a record $100 million by the Consumer Financial Protection Bureau (CFPB). Wells Fargo has fired at least 5,300 employees who were involved in the scam, according to The New York Times.
According to the regulators, employees created more than 2 million accounts that may not have been authorized by Wells Fargo customers, and covertly transferred funds to them from authorized accounts, racking up fees and other charges. They also created fake email accounts and PIN numbers to sign customers up for new accounts, most of which were unnoticed or closed shortly after opening. The scheme, which dates back to 2011, allowed employees to earn extra compensation and meet their sales targets.
"Today’s action should serve notice to the entire industry."
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the CFPB, said in a statement. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences."
The bank has agreed to pay $2.6 million to refund fees that were charged, according to the Times. Bank managers were among those who were fired for their involvement in the scheme, but a company spokesperson declined to tell the Times whether any senior-level executives were fired or implicated.
"Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us," the bank said in a statement Thursday. "Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request."