Wells Fargo Has To Fire 5,300 Employees For Scam Billing

[Sean Lynch]

https://www.techdirt.com/articles/20160908/17582535469/holy-crap-wells-fargo-has-to-fire-5300-employees-scam-billing.shtml

My comments:

I was wondering why you wouldn't simply liquidate a bank for something this
heinous, but then I realized what was probably already obvious to many on
this list: aside from the power of the execs and major shareholders, the
regulators know damn well this practice is rampant. If Wells Fargo got
anywhere near what it deserved for this massive scandal, the regulators
would be risking having to wipe out the entire banking system of the United
States when it becomes clear that they all do it.

Badly formatted paste follows:

*Holy Crap: Wells Fargo Has To Fire 5,300 Employees For *
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*Scam*
<http://www.google.com/gwt/x?u=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2Ftechdirt%2Ffeed%2F%7E3%2FeKU65VbL0xw%2Fholy-crap-wells-fargo-has-to-fire-5300-employees-scam-billing.shtml>*
Billing*
<http://www.google.com/gwt/x?u=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2Ftechdirt%2Ffeed%2F%7E3%2FeKU65VbL0xw%2Fholy-crap-wells-fargo-has-to-fire-5300-employees-scam-billing.shtml>

by Mike Masnick / Sep 9, 2016

This story is crazy. Late yesterday it was revealed that banking giant
Wells Fargo had to fire 5,300 employees over a massive
<http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html>
scam
<http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html>
in
which those employees created over 2 million fake accounts to stuff with
fees in order to meet their quarterly numbers. The Consumer Financial
Protection Bureau also fined the company $185 million
<http://www.consumerfinance.gov/about-us/blog/hundreds-thousands-accounts-secretly-created-wells-fargo-bank-employees-leads-historic-100-million-fine-cfpb/>
($100
million to the CFPB, $35 million to the Office of the Comptroller of the
Currency and another $50 million to Los Angeles). Oh and it needs to pay
back around $5 million to the customers it screwed over. The CFPB provides
some crazy details:

*Opening deposit accounts and transferring funds without
authorization:* *According
to the bank’s own analysis, employees opened roughly 1.5 million deposit
accounts that may not have been authorized by consumers. Employees then
transferred funds from consumers’ authorized accounts to temporarily fund
the new, unauthorized accounts. This widespread practice gave the employees
credit for opening the new accounts, allowing them to earn additional
compensation and to meet the bank’s sales goals. Consumers, in turn, were
sometimes **harmed** because the bank charged them for **insufficient**
funds or overdraft fees because the money was not in their original
accounts.*

*Applying for credit card accounts without authorization: **According to
the bank’s own analysis, Wells Fargo employees applied for roughly 565,000
credit card accounts that may not have been authorized by consumers. On
those unauthorized credit cards, many consumers incurred annual fees, as
well as associated finance or interest charges and other fees.*

*Issuing and activating debit cards without authorization:* *Wells Fargo
employees requested and issued debit cards without consumers’ knowledge or
consent, going so far as to create PINs without telling consumers.*

*Creating phony email addresses to enroll consumers in online-banking
services:* *Wells Fargo employees created phony email addresses not
belonging to consumers to enroll them in online-banking services without
their knowledge or consent.*

*The thing is, if 5,300 employees were a part of this, this was not some
random **scam**. This was a bank-approved plan to goose their numbers. It
seems like among the 5,300 employees, management should be in serious *
*trouble** as well. What's really astounding about all of this is that it
took this long for the practice to come to light. As the **CFPB** notes,
end users were impacted by this, and you'd think that **complaints** would
have made it clear that this was a problem much sooner. Or is that people
are just so used to getting screwed by their bank that they let it slide?
The CNN report notes that Los Angeles had sued Wells Fargo over this
practice last year (hence LA being a part of the settlement fines), but
having such a widespread **scam** going on is somewhat astounding. *

*And, of course, it raises questions about what other banks are doing
similar things as well. We've seen this kind of activity in the telco space
at times **with**cramming
<https://www.techdirt.com/blog/netneutrality/articles/20141019/18370828884/fcc-used-title-ii-to-fine-att-sms-cramming-world-didnt-end-why-would-it-broadband.shtml>**,
but that was generally third party scammers, where the **telcos** just
looked the other way. This was full-time Wells Fargo employees doing the *
*scam** itself, and the bank apparently either encouraging it or just
looking the other way from upper management.*
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