Today, federal regulators ruled that employees of Wells Fargo have been illegally establishing millions of bank cards and credit cards which have not been authorized by any customer. According to the regulators, this practice has been ongoing since 2011.
Allegedly, the falsified accounts were made in order for the bank to collect additional fees without the customer’s knowledge, this was done so that employees could fabricate and boost their sales in order to receive raises, bonuses, etc..
After this information was released, Wells Fargo claimed that they have terminated over 5,300 employees related to these practices. It apparently was commonplace for employees to even create fake PIN numbers and email addresses to create these fake accounts, according to the Consumer Financial Protection Bureau (CFPB) report.
A number of unethical behaviors occurred besides this, and the elaborate plan typically was effective as bankers transferred funds from the customer’s current account, into the newly established account. As a result, a number of different fees were often incurred that were forced to be paid to the bank.
In response to these issues, the $250 billion company agreed to pay $185 million in fines, and $5 million to be refunded to customers.
According to SEC filings, the bank reported having 265,000 employees at the end of 2015. With this number, it appears as if about 2% of their total staff had been laid off in response to this situation. The bank has agreed to increased oversight and changed in sales practices moving into the future.