A company investigation by Wells Fargo revealed that 1.4 million fake accounts may have been created by its employees. The accounts, created between January 2009 and September 2016, were discovered during the company’s investigation of 165 million retail banking accounts. This is in addition to 2.1 million fake accounts that were discovered by the company in an investigation of 93 million accounts.
To create the fraudulent accounts, employees accessed customers’ personal details and created fake email addresses. The accounts were also enrolled in different online banking platforms. Debit cards and PINs were also issued to the customers.
The scam affected 130,000 customers as they were charged with fines for having insufficient funds and overdraft fees on the fake accounts. Also, more than 60,000 people were wrongly charged finance and interest charges. Wells Fargo said the victims will be reimbursed.
The phony account scandal has already cost 5,300 Wells Fargo employees their jobs over the years. It also forced the company to replace John Stumpf with Tim Sloan as the CEO. Sloan said, “We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank.”
Last year, the Consumer Financial Protection Bureau slapped Wells Fargo with $185 million in fines for fake accounts. It said, “Spurred by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges.”
