A customer fraud probe cost 5,300 Wells Fargo employees their jobs – but regulators stopped short of pointing any fingers at the bank’s executives.
Under intense pressure to hit sales targets, employees opened additional bank accounts and credit cards for customers without their consent, using fake email addresses and forged signatures in a widespread practice that will now cost Wells Fargo a record $185million fine.
Investigators acknowledged systemic problems like the lack of oversight but failed to hold high-level executives responsible as they received hefty paychecks and accolades for creating growth.
Wells Fargo was worth just shy of $300billion, making it the world’s most valuable bank in the world according to figures released last year.
The bank was known for it’s ability to ‘cross-sell’ or get customers to sign up for more and more accounts, which attracted the financial backing of Warren Buffett’s Berkshire Hathaway.
Buffett’s firm is the largest owner of Wells Fargo with a 9.5% stake in the bank.
According to a criminal complaint filed in California, the bank largely targeted checking account customers, pushing them into taking savings, online or credit accounts which would charge fees.
Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint.
A 2013 LA Times investigation found a culture that left some employees desperate to reach quotas, whether it was forging signatures or begging family members to open additional accounts.
In some cases, employees created fake email addresses and pin numbers to create more accounts, and customers were charged for overdraft fees after their money was moved without their consent.
Source: Daily Mail UK