Yesterday the Department of Justice announced that Wells Fargo has agreed to pay $3 billion in fines due to banking gaming practices.
The fines that were due to gaming practices are identified as followed:
- Forging customer signatures to open accounts without authorization.
- Creating PINs to activate unauthorized debit cards.
- Moving money from millions of customer accounts to unauthorized accounts in a practice known internally as “simulated funding”.
- Opening credit cards and bill pay products without authorization.
- Altering customers’ true contact information to prevent customers from learning of unauthorized accounts to prevent Wells Fargo employees from reaching customers to conduct customer satisfaction surveys.
- Encouraging customers to open accounts they neither wanted or needed.
In response to the settlement, Wells Fargo CEO Charlie Scharf said,”The conduct at the core of today’s settlements — and the past culture that gave rise to it — are reprehensible and wholly inconsistent with the values on which Wells Fargo was built. Our customers, shareholders and employees deserved more from the leadership of this Company. Over the past three years, we’ve made fundamental changes to our business model, compensation programs, leadership and governance. While today’s announcement is a significant step in bringing this chapter to a close, there’s still more work we must do to rebuild the trust we lost. We are committing all necessary resources to ensure that nothing like this happens again, while also driving Wells Fargo forward”.
U.S. Attorney Andrew Murray for the Western District of North Carolina said in the Department of Justice Press Release,”Our settlement with Wells Fargo, and the $3 billion monetary penalty imposed on the bank, go far beyond ‘the cost of doing business. When a reputable institution like Wells Fargo caves to the pernicious forces of greed, and puts its own interests ahead of those of the customers it claims to serve, my office will not sit idle. Today’s announcement should serve as a stark reminder that no institution is too big, too powerful, or too well-known to be held accountable and face enforcement action for its wrongdoings”.
