Fines and More for Wells Fargo - Card Issuers News

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Card Issuers » Fines and More for Wells Fargo

Fines and More for Wells Fargo

Add to Favorites:
Fines and More for Wells Fargo
September
14

Wells Fargo was slapped with nearly $200 million in fines by the Consumer Financial Protection Bureau for opening credit card and bank accounts for consumers who had no idea that they were being set up. Accounts were started as far back as 2011.
According to Wells Fargo’s investigation, employees opened up to two million unauthorized accounts including 1.5 million unauthorized deposit accounts and roughly 565,000 credit card accounts.
The bank was mandated to pay full restitution to consumers impacted by this along with a $100 million fine to the CFPB’s Civil Penalty Fund, a $35 million fine to the Office of the Comptroller of the Currency, and $50 million goes to both the City and County of Los Angeles.
The fines total $186 million – the biggest fine ever levied by the CFPB. And that does not include $5 million in consumer restitution they will be paying out. “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” said CFPB Director Richard Cordray. “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.”

Employees over extend

In order to meet sales targets and to get compensation incentives, Wells Fargo employees jacked up sales by secretly opening either deposit accounts or credit card accounts – and then funding them via transfers from authorized accounts. This resulted in consumers being hit with fees and other charges for the unauthorized accounts.
Employees also issued and activated debit cards without the cardholders knowing this was occurring, and in some cases creating PINs. They also created fake email address to sign consumers up for online banking services. All without consent.

Paying up

The CFPB has the right to take action against institutions that violate consumer financial laws due to the Dodd-Frank Wall Street Reform and Consumer Protection Act. These transgressions include engaging in unfair, deceptive or abusive acts or practices.
The order against Well’s Fargo goes back to 2011, and includes paying refunds to consumers for fees and charges associated with these accounts including all monthly maintenance fees, non-sufficient fund fees, and overdraft charges, as well as any other fees that go with these unauthorized accounts.
Wells Fargo will also have to hire an an independent consultant to review their procedures, and make recommendations to stop this from happening again. These recommendations may well include mandating ethical-sales training to employees, as well as assessing the bank’s performance measurements and sales goals for consistency.

All credit cards terms, fees and rates mentioned in this article/post are actual on the posting date. See the current products’ Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Wells Fargo Speeding Up Payments
Wells Fargo Speeding Up Payments

Posted: January 05, 2017

MasterCard and Wells Fargo & Co. have joined forces, so that now MasterCard Send is fueling payments for Wells Fargo Treasury Management and Wells Fargo Merchant Services customers. Continue reading
Wells Fargo and PayPal Partner Up
Wells Fargo and PayPal Partner Up

Posted: April 25, 2017

In the near future, Wells Fargo customers will be able to pay for everything from groceries and gas to electronics and more using PayPal in brick and mortar stores. Continue reading
Upswing in Small Businesses Confidence
Upswing in Small Businesses Confidence

Posted: August 11, 2017

Small business owners are feeling good about revenue, credit and hiring this quarter, according to a new study by Wells Fargo, finding that optimism is at the highest it's been in a decade. And it has risen significantly this year, with... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Match Mile For Mile: We’ll match all the Miles you’ve earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
You could turn $150 into $300 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
For Excellent, Good Credit
No Annual Fee. See WebBank/Fingerhut Credit Account Terms.
For Bad Credit