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Published: Fri, September 09, 2016
Economy | By Melissa Porter

Wells Fargo fined $185 million for improper account openings

Wells Fargo fined $185 million for improper account openings

On the company's financial health, Wells Fargo & Co reported $1.01 EPS for the quarter, based on the information available during the earnings call on Jul 15, 2016.

Although it's not clear whether the action involves San Francisco-based Wells Fargo, previous year Feuer sued Wells over what he called high-pressure sales goals he said encouraged unfair, illegal and fraudulent conduct, such as issuing unwanted credit cards to customers.

The scope of the scandal is shocking.

Opening about 1.5 million deposit accounts without authorization and transferring money from customers' existing accounts to the new ones.

Former employees say they were pressured to meet sales goals.

The behavior was widespread, the CFPB and other regulators said, involving thousands of Wells Fargo employees.

The CFPB said Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers.

"Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed", said Richard Cordray, director of the regulator. $5 million has been set aside for customer refunds. According to these analysts, the Low Revenue Estimate for Wells Fargo & Company is 21.72 Billion and the High Revenue Estimate is 22.86 Billion. The $50 million civil penalties under the city settlement will go toward "future consumer protection", according to Feuer's office. "It sounds like a big number, but for a bank the size of Wells Fargo, it isn't really".

The Wells Fargo Mobile Response Unit is located at 1020 South Range Ave.in Denham Springs, LA. The proportion of loans in the U.S.is based on individual disclosures by the banks about non-U.S. loans at the end of the period.

Wells said in a statement that it settled "in the interest of putting this matter behind us".

The CFPB declined to comment on when the investigation began and what sparked it, citing agency policy. Whether they make any changes as a result is a different story. The Company is a financial services company, which offers banking, insurance, trust and investments, mortgage banking, investment banking, retail banking, brokerage, and consumer and commercial finance. Wells Fargo mortgage consumers can also receive disaster assistance services at the firm's mortgage offices located in Baton Rouge and Lafayette. Wells Fargo has been the topic of 31 analyst reports since September 25, 2015 according to StockzIntelligence Inc.

"How does a bank that is supposed to have robust internal controls permit the creation of over a half-million dummy accounts?" asked Vladeck.

Many banks encourage their customers to buy more than one financial product-cross selling-but Wells Fargo has been more upfront about how much it does.

Wells Fargo also addressed the penalty in an email to employees Thursday.

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