September 8, 2016

Wells Fargo Bank has agreed to pay the largest fine in history and has fired 5,300 employees for creating "ghost accounts" for customers without their authorization.

According to the CFPB release, bank employees opened credit card accounts and other accounts for customers. In some cases, they transferred money from the customer's existing account into the new account they created, causing overdraft fees and other fines.

"The Bank had compensation programs for its employees that encouraged them to sign up existing clients for deposit accounts, credit cards, debit cards, and online banking," CFPB writes. "According to today’s enforcement action, thousands of Wells Fargo employees illegally enrolled consumers in these products and services without their knowledge or consent in order to obtain financial compensation for meeting sales targets."

"Bank employees temporarily funded newly-opened accounts by transferring funds from consumers’ existing accounts in order to obtain financial compensation for meeting sales targets. These illegal sales practices date back at least five years and include using consumer names and personal information to create hundreds of thousands of unauthorized deposit and credit card accounts."

In addition to the $100 million fine imposed by the CFPB, an additional $85 million in fines have been imposed by cities, adding up to a total of $185 million. Wells Fargo will also pay another $5 million to reimburse customers for fees taken out of their accounts.

This is your reminder that the CFPB is the agency Republicans most want to eliminate. Today's action should also remind you about why it must never be eliminated.

Meanwhile, Wells Fargo has tweeted their regrets:

UPDATE: Here's a statement from a former Wells Fargo worker who tried to organize against sales goals.

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