News has just broke that Wells Fargo has terminated 5300 employees from around the country over the past 2 years for fraudulent behavior. The Director of the Consumer Financial Protection Bureau, Richard Cordray, said, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,”.
The scale of this scandal is shocking. Analysts early estimates are that Wells Fargo employees opened around 1.5 million fraudulent accounts to help them meet internal quotas.
CNN Money explained:
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.
Wells Fargo has promised a “full restoration to all victims” and an investigation. The company will also be fined $185 million in civil penalties