Last week, banking giant, Wells Fargo, agreed to a settlement with federal and state prosecutors in a California court to pay $185 million in penalties and $5 million in damages to affected customers following a wide-spread financial fraud scandal.
In May of last year, it was alleged that Wells Fargo had assigned fee-generating savings and credit accounts to customers with out prior knowledge or consent. According to a report from the Consumer Financial Protection Bureau (CFPB), this led to the creation of more than 2 million potentially unauthorized deposit and credit accounts.
The full amount of the $100 million fine charged by the CFPB will constitute the largest such fine the agency has ever imposed since its inception in the wake of the 2008 financial crisis. A $35 million penalty will be paid to the Office of the Comptroller of Currency and $50 million in damages will be paid to the city and county of Los Angeles. The settlement also provides an additional $5 million in customer restitution.
Unlike other fraud cases–in which a small number of high-ranking executives are responsible–this case constitutes widespread fraud and corruption on a regional level. In response to company-wide sales projections and increased incentives, roughly 5,300 employees across the nation engaged in creating a variety of fee-generating accounts for customers that had not requested them.
Though Wells Fargo has since terminated these employees after investigating the CFPB allegations and has pledged to fulfill the settlement, it remains to be a case of widespread financial fraud against consumers. The effects of this case are far-reaching as Wells Fargo is one of the nation’s largest banks, with roughly 70 million customers in the U.S.
The banking giant has many clients in the Tampa Bay area and across Florida that may have been adversely affected by this case. If you have been notified about a civil restitution case or believe you have been affected, Call Savage Villoch, PLLC today and we will find out exactly how you were affected and what you are owed.
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