Wells Fargo has long been viewed as a reliable, legitimate, and upscale banking institution, but its reputation has come crumbling down in the past weeks as lawsuits and allegations have been splashed across newspaper headlines.
The problems began when Wells Fargo was ordered by federal regulators to pay $190 million at the beginning of September. The fine came as a response to the discovery that Wells Fargo employees had secretly created millions of unauthorized bank and credit card accounts without customer approval. This secret account and card opening had been occurring since 2011, tricking customers into paying fines on accounts they didn’t even know they had in their name. According to the director of the Consumer FInancial Protection Bureau, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses.”
Employees were so desperate to please their superiors and earn their bonuses that they created phony PIN numbers and fake email addresses in order to enroll customers without their knowledge. According to the bank, 5,300 employees were fired since 2011 due to shady business practices, but the problems still continued. And the $190 million fine hardly made these issues disappear.
Now Wells Fargo workers are fighting back in a class action lawsuit. Six total workers are seeking $7.2 billion for workers nationwide who were fired or demoted after refusing to open fake accounts for Wells Fargo. The lawsuit began in California but is now open to the country and accuses the banking giant of a “fraudulent scheme” to boost stock prices.
In response to all of this, Wells Fargo CEO John Stumpf has forfeited the majority of his 2016 salary, including his bonus and $41 million in stock awards, and agreed to work for free during the investigation. Carrie Tolstedt, who headed the division that created the fake accounts, resigned ahead of her end-of-year retirement and will not receive a bonus or severance.
It’s safe to say that process servers around the country will be kept very busy with all of the legal trouble that Wells Fargo has stirred up!
