Santa Clara, CA: Wells Fargo customers are concerned that the $5 million payback from the bank over the massive banking fraud that was revealed to the public this week, may not go far enough. Customers who have had fake checking accounts set up in their names and subsequently called the bank and had them cancelled, have warned their family and friends to be weary.
A Los Angeles City Attorney 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, CNN Money reported.
Wells Fargo is facing $185 million in fines, after authorities uncovered millions of unauthorized bank and credit card accounts set up by bank employees in order to boost or hit sales targets. Further, the employees also made up PIN numbers and email accounts in connection with the false accounts, to get people to sign up for online banking services, the Consumer Financial Protection Bureau (CFPB) said in a statement.
According to federal regulators, the fraud has been going on since 2011, without customer knowledge. The scale of the fraud is enormous, with more than 1.5 million unauthorized deposit accounts opened by Wells Fargo employees since 2011.
The scam involved employees transferring customers’ funds from legitimate accounts to newly-created ones without customer knowledge or consent. The CFPB described this practice as "widespread." Wells Fargo customers were then being charged fees for insufficient funds or overdrafts, because they didn’t have enough money in their legitimate accounts.
Further, the Wells Fargo employees also submitted applications for 565,443 credit card accounts, all without their customers' knowledge or consent. Some 14,000 of those accounts earned over $400,000 in fees for the bank, including annual fees, interest charges and overdraft-protection fees, CNN Money reported.
Wells Fargo will pay $185 million in fines, the largest amount the CFPB has ever charged.