by Loren Haas
Federal regulators discovered millions of phony bank accounts created by Wells-Fargo employees to boost sales figures. The bank fired 5,300 employees, who had been making the accounts since 2011 and used the fees related to those accounts to earn more pay and more money for the company.
So far, a consulting firm hired by the company has confirmed 1.5 million unauthorized deposit accounts and 565,442 unauthorized credit card accounts, approximately 14 thousand of which earning the company over $400,000 in fees.
Wells-Fargo has agreed to pay $5 million in restitutions and a $185 million fine from the Consumer Finance Protection Bureau (CFPB). This fine is the largest fine the CFPB has ever given a corporation since its founding in 2011.
“We regret and take responsibility for any instances where customers may have received a product that they did not request,” said Wells-Fargo in a statement.
Wells-Fargo is facing consequences outside of the official rulings; its stock has gone down $65.3 billion, and it lost its title as the most valuable U.S. bank. This title, which it held for three years, now belongs to J.P. Morgan.
The creation of the fake accounts took incredible skill; in some cases, employees made fake PIN numbers and email addresses so they could enroll consumers into online banking services.
The issue first came to light when Los Angeles attorney Mike Feuer sued the bank over allegations of unauthorized bank accounts in 2015. During the lawsuit, Feuer received over one thousand calls and emails from Wells-Fargo customers and employees regarding the allegations. Wells-Fargo did not say whether or not they hired a firm to investigate the claims; however, a source for CNNMoney said the company launched a review into the claims.