Feb. 22 (UPI) — Wells Fargo agreed to pay $3 billion to resolve allegations the bank pressured employees to meet “unrealistic” sales goals, leading to the creation of millions of fake customer accounts, the Justice Department announced Friday.
In the settlement, the company admitted it collected millions of dollars in fees and interest through the fake accounts and other products to which it wasn’t entitled. The U.S. Attorney’s Office in the Central District of California said Wells Fargo also harmed the credit ratings of some customers and unlawfully used customers’ personal information in the process.
“This case illustrates a complete failure of leadership at multiple levels within the bank. Simply put, Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way,” U.S. Attorney Nick Hanna said. “We are hopeful that this $3 billion penalty, along with the personnel and structural changes at the bank, will ensure that such conduct will not reoccur.”
Wells Fargo came under scrutiny for its practices in 2015 after a lawsuit accused the company of illegal sales tactics. The lawsuit pointed to a brochure encouraging employees to make sure customers on average had eight open accounts with Wells Fargo as part of its “Going for gr-eight” campaign.
Employees created thousands of phony accounts and manipulated some real accounts to boost sales figures and earn bonuses. The bank responded by firing more than 5,000 workers and pledged to end sales goals.
CEO John Stumpf resigned a year later amid backlash over the scandal and last month was fined $17.5 million for his role.
As part of the settlement, the Justice Department said it won’t prosecute Wells Fargo for the scam during a three-year period if the company complies with certain conditions, including cooperating with ongoing investigations.