Unless you’re one of the few people still watching CNN, you may have missed what can only be one of the most scandalous in-house criminal activities to be uncovered at a bank. And not just any bank. It happened at none other than Wells Fargo, which, up until the scandal was revealed, was the number one bank (as measured via its market cap) in the U. S. The scandal? Here are just a few highlights as reported. To wit:
‘On Thursday, federal regulators said Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts – without their customers knowing it – since 2011.
The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.
‘Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,’ Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.’
And to use CNN’s own words to describe it: ‘The scope of the scandal is shocking.’
How shocking you may ask? Fair enough, here’s a little more from their reporting…
‘The way it worked was that employees moved funds from customers’ existing accounts into newly-created ones without their knowledge or consent, regulators say. The CFPB described this practice as ‘widespread.’ Customers were being charged for insufficient funds or overdraft fees – because there wasn’t enough money in their original accounts.
Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers’ knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.’
This post was published at David Stockmans Contra Corner on September 18, 2016.
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