NEWS BRIEF Wells Fargo employees created millions of fake bank and credit-card accounts over the past five years in a widespread scheme to collect fees and hit sales targets, federal regulators said Thursday.
As a result, Wells Fargo is being fined $185 million, in what is the largest fine since the Consumer Finance Protection Bureau was founded in 2011. Wells Fargo has also fired 5,300 employees who were involved in the fraudulent practice.
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An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up over 1.5 million deposit accounts that may not have been authorized, according to the CFPB.
The way it worked was that employees moved funds from customers' existing accounts into newly-created accounts without their knowledge or consent, regulators say.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit-card accounts without their knowledge or consent, the CFPB said the analysis found.
In addition to the lofty fines, Wells Fargo, one of the largest banks in the country, has agreed to refund customers $5 million. Officials with the bank said they “regret and take responsibility” for the scheme.
Richard Cordray, the director of the CFPB, said the bureau’s actions “should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”
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