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Well Fargo Fires 5,300 Employees After Fake Account Scandal

Well Fargo Fires 5,300 Employees After Fake Account Scandal

Earlier Thursday, U.S. regulators said Wells Fargo & Co (NYSE: WFC) would have to pay $190 million to settle claims of its employees having created deposit and credit card accounts without the approval of its customers.

Apparently, the employees used this tactic to reach sales goals and gain monetary bonuses and rewards.

According to a statement from the Consumer Financial Protection Bureau, the bank opened more than 2 million without consent – more than 1.5 million deposit accounts and 565,443 credit card accounts.

In relation with this scandal, Wells Fargo announced it would fire 5,300 employees. As part of the settlement, the company also agreed to pay a $100 million fine to the CFPB, an extra $35 million to the Office of the Comptroller of the Currency, $50 million to the Los Angeles city attorney, and finally, $5 million to defrauded customers.

"Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us," the bank assured. “We regret and take responsibility for any instances where customers may have received a product that they did not request."

CFPB Director Richard Cordray stated, “Today's action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

Posted-In: Wall Street JournalNews Legal Media Best of Benzinga


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