Wells Fargo & Co (NYSE:WFC) a Sell as Investigation Heats Up
Fraud at WFC looks to be ingrained in to the very fabric of the operations, Wells Fargo has already agreed to pay $185 million in fines after the exposure of elaborate schemes that directly and intentionally defrauded customers in line with a business model, organized from the highest levels of the company.
According to the US Consumer Financial Protection Bureau (CFPB), the bank opened a staggering 1.5 million fraudulent deposit accounts and more than half a million credit card accounts without customers’ authorization. Bank employees illegally moved funds from customers’ accounts into newly-created accounts.
The CFPB said this practice was “widespread” and resulted in customers being charged for insufficient funds or overdraft fees because required amounts were not in their accounts. The bank also created more than 565,000 credit card accounts, of which some 14,000 incurred more than $400,000 in fees and interest charges.
The bank is attempting to lay the blame on “rogue employees” and revealed that since 2011 it had sacked 5,300 staff. But the fraud operation resulted from a strategy imposed from the top.
Thomas Curry, the Comptroller of the Currency, said on Tuesday that his agency is considering action against individual Wells Fargo executives after a customer fraud was detected at the bank.
“The OCC may take formal enforcement actions against institution-affiliated parties, including directors, officers, and employees, who violate any law or regulation, engage in unsafe or unsound practices, or breach fiduciary duty,” Curry told a hearing of the Senate Banking Committee.