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Wells Fargo Scandal...
pjalive21
St. Louis, MO Posts: 2,818
http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html
Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for.
That's exactly what happened to Wells Fargo customers nationwide.
On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011.
The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.
Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees related to the shady behavior over the last few years. Employees went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.
The scope of the scandal is shocking. 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. 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. Many customers who had unauthorized credit cards opened in their names were hit by annual fees, interest charges and other fees.
The CFPB said Wells Fargo will pay "full restitutions to all victims."
Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.
"We regret and take responsibility for any instances where customers may have received a product that they did not request," Wells Fargo said in a statement.
Wells Fargo confirmed to CNNMoney that the firings represent about 1% of its workforce and took place over several years.
"At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action," the bank said in a memo to employees on Thursday.
It's not clear when Wells Fargo hired a consulting firm to investigate the allegations, nor what triggered the response. Wells Fargo did not respond to a request for comment on this.
The CFPB declined to comment on when the investigation began and what sparked it, citing agency policy. "We don't comment on how we uncover these matters," a spokesman said.
As part of the settlement, Wells Fargo needs to make changes to its sales practices and internal oversight.
"Consumers must be able to trust their banks. They should never be taken advantage of," said Mike Feuer, the Los Angeles City Attorney who joined the settlement.
Feuer's office sued Wells Fargo in May 2015 over allegations of unauthorized accounts. After filing the suit, his office received more than 1,000 calls and emails from customers as well as current and former Wells Fargo employees about the allegations.
Even though the Wells Fargo scandal took place nationally, the settlement with L.A. requires the bank to alert all its California customers to review their accounts and shut down ones they don't recognize or want.
Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for.
That's exactly what happened to Wells Fargo customers nationwide.
On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011.
The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.
Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees related to the shady behavior over the last few years. Employees went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.
The scope of the scandal is shocking. 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. 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. Many customers who had unauthorized credit cards opened in their names were hit by annual fees, interest charges and other fees.
The CFPB said Wells Fargo will pay "full restitutions to all victims."
Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.
"We regret and take responsibility for any instances where customers may have received a product that they did not request," Wells Fargo said in a statement.
Wells Fargo confirmed to CNNMoney that the firings represent about 1% of its workforce and took place over several years.
"At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action," the bank said in a memo to employees on Thursday.
It's not clear when Wells Fargo hired a consulting firm to investigate the allegations, nor what triggered the response. Wells Fargo did not respond to a request for comment on this.
The CFPB declined to comment on when the investigation began and what sparked it, citing agency policy. "We don't comment on how we uncover these matters," a spokesman said.
As part of the settlement, Wells Fargo needs to make changes to its sales practices and internal oversight.
"Consumers must be able to trust their banks. They should never be taken advantage of," said Mike Feuer, the Los Angeles City Attorney who joined the settlement.
Feuer's office sued Wells Fargo in May 2015 over allegations of unauthorized accounts. After filing the suit, his office received more than 1,000 calls and emails from customers as well as current and former Wells Fargo employees about the allegations.
Even though the Wells Fargo scandal took place nationally, the settlement with L.A. requires the bank to alert all its California customers to review their accounts and shut down ones they don't recognize or want.
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
the fundamentals of our economy are based on mythological objectives that do not serve societal needs ... what we discussed about the unemployment rate is a great example ...
the economy should be founded on principles of sustainability ... not just environmental but economic sustainability ... it should focus on creating a system that accounts for injustices and inequities ... not just seek profits and growth ... an economy that seeks for people to earn living wages not amass as much wealth as possible without consequence ...
For me, I believe we should strive for equality of opportunity, not equality of outcomes. If you are in the workforce with more than 10 people, I'm sure you see it everyday. There are people who work harder than other people. People who care more, put in more hours, create a better work product. Why should the reward be the same? That makes no sense to me.
it's definitely socialist in principle but nowhere near communism ...
like barack obama said ... global warming is the biggest threat to life on this planet ... and yet the environment is an afterthought in the metrics of the economy ... the well being of people is not considered ...
the current structure is a rigged game ... it should be blatantly obvious by now ...
I'll take you up on the 'rigged game' comment later. I don't understand this phrase in its current context and it has been used and abused in 2016.
it's not about everyone getting everything for free or not rewarding hard work ... it's about promoting the outcomes that is in the interests of all ... take the nfl for example ... the objective is to win the superbowl ... only 1 team can ... and we've seen in recent history what teams will do to achieve that ... concussions, addiction to pain killers, spygate, deflategate, steroids, etc ... imagine a game where the objective is for players to have fun and stay active so that they can live a healthy lifestyle into their later years? ... the economic system now is more reflected by the NFL than it does a system that's meant to benefit society ...
competition is necessary, not just in the example of the NFL, but in the market...its the dirty antics used in both that need to be scrubbed out its not necessarily the systems themselves that are the problems which has been seen in both our economy and those in socialism and communism
use 5 words that you would want your society to be about ... your idea ...
"Life Is What Happens To You When Your Busy Making Other Plans" John Lennon
Now youth sports is different. I coached youth baseball, from Pre-K to high school. And the focus on health, sportsmanship, everyone playing, etc. was something that I very much advocated. I've had to deal with many parents who could not understand why I was playing X at 3rd base for two innings when he was a liability. What happens is the lower performers eventually leave. They quit, usually by middle school and then the focus shifts to competition and winning. When you get to college and pro, that's what it's about. But you can do that and play by the rules. We didn't teach kids how to grease a ball, or to slide spikes up. That is dirty. You can win and play the game correctly.
In business, there are degrees to winning. Apple wants to dominate the cell phone market, but the FTC would never let them buy Android from Google. That would eliminate competition and therefore against the Federal antitrust laws. So while sports has one champion, business does not. The gov't creates specific limits to 'victory'. There are rules and they should be enforced. And just like in sports, rules should always be evaluated for their effectiveness and whether they need to be tweaked to continue to encourage competition in the market place. I guess my point is, I never believe in blowing shit up. I always believe in modifying, and tweaking.
Regarding the Exxon example, I'm not sure if that is their motivation or not, but I know many companies due take that tact. Paying the fine is cheaper than complying and I agree that is bullshit. For many statues (FDCPA for example), the fine can be 1% of the companies annual revenue, I believe. That is a steep ass fine and we need more like that. That will change the calculation.
From a company that issued fraudulent mortgages, illegally foreclosed on homes, enslave college students in education debt and was involved in predatory lending and payday loan business then went crying to the government for millions in handouts and impunity.
Truly shocking from such a social and ethically conscience company!