5,300 Wells Fargo Employees Fired for Creating Millions of Phony Accounts

Wells Fargo Stock Photo

NEW YORK — 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.

The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up 1,534,280 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.

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 represents about 1% of its workforce.

“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.

4 comments

  • Lisa Turner

    Citizens bank does the same thing. Closing consumer loans and mortgages saying that credit cards come with the loan. If sales people don’t hit the goals they need to meet they are threatened with write ups or termination. It’s a sales oriented environment. They don’t care about the customer just the bottom line. Buttom line they need the accounts to drive revenue. All the banks can say they are customer oriented however the larger banks do not care about you as the customer. The VP’s care about the large bonuses and large salaries and how much money the bank is making.

  • Concerned

    Wells Fargo sets it goals so high for their employees. If they don’t reach those goals quarterly they can get coached, written up, or even terminated. I look at this company as someone who doesn’t want their employees to make incentive. The employees have a hard time hitting these goals that this is the sad out come. Shame on Wells Fargo for not being fair to their employees and for putting them in a situtation to cheat the system to keep their job to feed their families.

  • Santander is doing it too!

    That’s what Santander must be doing!! I closed my account with them over a decade and every few years an account in my name mysteriously opens and I get a new bank card in the mail, in my name, mailed to me at the last address they had for me WITH a PIN!! WNEP – Investigate Santander Bank! Because every time this happens to me, I go into a local office and demand answers and that the account be closed. The best answer I’ve gotten from them so far was “We don’t know what happened, but we’ll close your account again for you.” Then a few years go by and BOOM! It’s reopened! What if someone else lived at the address they mailed the card and PIN to in my name?!?!

Comments are closed.