Wells Fargo hit with $190m regulatory fine for customer fraud
The Consumer Financial Protection Bureau has fined Wells Fargo for $185m and ordered the bank to pay $5m to customers after over two million deposit accounts were created without customer authorisation. This “widespread” practice saw customers being charged overdraft fees or fines for having insufficient account funds after transfers had been made.

Wells Fargo has been ordered to pay a record-breaking $190million and has fired 5,300 employees after a huge customer fraud probe.

Investigators from the Consumer Financial Protection Bureau found staff signing customers up to additional bank accounts and credit cards without their knowledge.

While bankers used the extra accounts to hit sales targets and secure bonuses, customers found themselves hit with charges and fees for the ghost accounts.

Wells Fargo has been fined $185million, told to repay $5million to customers, and has fired 5,300 staff after they were caught creating phony accounts to fix sales figures

In total, a consulting firm hired by Wells Fargo to investigate the fraud found more than 2million deposit accounts that may not have been authorized.

The CFPB has fined the bank $185million, the largest penalty levied since the organization was created in 2011 in the wake of the financial crash.

The bank has also agreed to pay more than $5million in restitution to customers.

Of that money, $2.6million is in refunds for fees applied to products that customers may not have requested, according to the bank.

The staff have been fired over the past few years as the shady behavior was uncovered, CNN Money reports.

According to a criminal complaint filed in California, the bank largely targeted checking account customers, pushing them into taking savings, online or credit accounts which would charge fees.

Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint.

On some occasions, when customers could not be persuaded to sign up for the additional accounts, they were created anyway without the knowledge.

Up to 2million deposit accounts were created for customers who didn't want or request them, an investigation found, while thousands more were hit with unnecessary fees and charges

Staff moved funds from customers' existing accounts into new accounts that they had not asked for.

The 'widespread' practice led to customers being charged overdraft fees or fined for having insufficient funds after the money was moved from their initial account.

The bank said that the deal this week settles the 'allegations that some of its retail customers received products and services that they did not request.

'Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us.

'We regret and take responsibility for any instances where customers may have received a product that they did not request.'

CFPB Director Richard Cordray said: '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.'