Wells Fargo to pay $185mn over unauthorized accounts


Washington (AFP)

Retail and commercial banking giant Wells Fargo will pay more than $185 million in fines after US regulators accused the bank of secretly opening accounts without customers' knowledge, officials said Thursday.

The Consumer Financial Protection Bureau said employees at Wells Fargo, the world's largest bank by market value, had illegally boosted sales figures by opening unauthorized deposit and credit accounts and then covertly funding them with customers' money, sometimes creating phony email addresses to enroll them.

This resulted in fees and other charges for customers and improperly helped bank employees meet sales targets and receive bonuses, according to the CFPB.

Wells Fargo will pay $100 million to the CFPB, the largest fine to date imposed by the bureau, which was created in the wake of the 2008 financial crisis.

The San Francisco-based bank will pay $50 million to the City of Los Angeles, which had filed suit last year, accusing the bank of pressuring employees into fraudulent behavior, such as opening fictitious accounts.

The bank will also pay a $35 million fine to banking regulators at the Treasury Department in addition to fully compensating all customers concerned, the CFPB said in a statement.

“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," CFPB Director Richard Cordray said in a statement.