The $185 Million Scandal

Wells Fargo Bank just incurred $185 Million in civil penalties for secretly creating unofficial deposit and credit accounts that harmed their clients. According to Federal and state officials, Wells Fargo employees enhanced sales by opening over two million new accounts and funding them through transfers from authorized client accounts without permission.
The civil action charged Wells Fargo of “victimizing their customers by using pernicious and often illegal sales tactics to maintain high levels of sales of their banking and financial products.” The bank had built an incentive-compensation program that the employees took advantage of and wasn’t monitored nearly enough. Thousands of the bank employees misused client information to create these false accounts to get their sales bonuses.
The bank agreed to pay the $100 fine to the Consumer Financial Protection Bureau, the $35 million fine to the Office of the Controller of the Currency, and the additional $50 to the City of Los Angeles. They also fired 5,300 employees and managers.
Ultimately, Wells Fargo also agreed to fully reimburse all victims, with the total refunded adding up to $2.6 million. Accounts refunded represented a fraction of one percent of the accounts reviewed, averaging $25 each.