Wells Fargo Bank Scandal
As you may have heard, the company Wells Fargo Bank recently had a scandal in relations to customer accounts. The scandal came to light when the Consumer Financial Protection Bureau (CFPB) fined the bank 185 million dollars in regards to more than 2 million dollars bank accounts or credit cards were opened or applied for without customers’ knowledge or permission between May 2011 and July 2015.
According to the Los Angeles City Attorney, employees were opening and funding accounts without customers' permission or knowledge in order to "satisfy sales goals and earn financial rewards under the bank's incentive-compensation program." This program has now affected many customers negatively as well as the company as a whole.
How did this really affect customers? Wells Fargo Bank conducted a review to uncover "the scope of Improper Sales Practices that occurred between May 2011 and July 2015." That analysis revealed more than 1.5 million dollars deposit accounts "that may not have been authorized”. From that number, 85,000 accounts generated fees for the bank worth about 2 million dollars.
Those fees were from overdraft fees, monthly service fees, and minimum balance penalties. Some of the accounts singularly had racked up 400,000 thousand dollars in debt. Imagine having that amount of debt without knowing it was even happening. This is what happened to the customers from Wells Fargo Bank.
There are ongoing investigations happening and over 5,000 employees have been terminated so far. More information will eventually be provided as the case progresses.