Wells Fargo – the third largest bank in the United States with $ 2 trillion in assets – will pay a $ 575 million transaction after admitting that it has systematically defrauded its customers for 15 years. Ironically, the fine only comes a few months after the banking giant has liquidated Bitcoin as too risky investment.
According to a national federal investigation, Wells Fargo admitted that its employees have opened more than 3.5 million fictitious, unauthorized accounts and credit cards in customer names between 2002 and 2017.
The bank then illegally charged its customers with the various financial services products they have never joined, such as life insurance policies and collateral insurance on millions of car loans.
The employees claimed to be involved in this widespread fraud because they feared losing their jobs if they did not meet Wells Fargo's aggressive sales targets.
Over $ 2 billion in fines since 2016
The settlement will be distributed to all 50 states in the United States and to the District of Columbia. Wells Fargo will also open a consumer restitution review program to ensure that anyone who has been illegally charged for a service that has never authorized will be reimbursed.
The revelation of this fraudulent scheme in 2016 led to the resignation of Wells Fargo's managing director at the time, John G. Stumpf.
After establishing himself with the Consumer Financial Protection Office, Wells Fargo still faces ongoing investigations by the Securities and Exchange Commission, the Department of Justice and the Department of Labor, based on his most recent deposition of titles.
Wells Fargo has grossed over $ 2 billion in fines since its fake accounting scandal was revealed in 2016.
Wells Fargo to Paying States Approximately $ 575 million to settle claims for damages to customers; The latest agreement covers retail and self-loan practices, mortgage fees https://t.co/xrY4jaAXy5 pic.twitter.com/xKveGD6eKD
– Barry Ritholtz (@ritholtz) December 28, 2018
California attorney general Xavier Becerra burned Wells Fargo for his serious violation of consumer protection laws.
In a statement dated December 28, Becerra said that the inexplicable abuse by Well Fargo of its customers undermines consumer confidence in the banking system.
"Instead of safeguarding its customers, Wells Fargo exploited them, subscribing them for products – from bank accounts to insurances – that they never wanted," said Becerra.
This is an incredible breach of trust that threatens not only customers who depend on Wells Fargo, but also confidence in our banking system. The conduct of Wells Fargo was illegal and shameful.
Ironic warning: Wells Fargo Shades Crypto
Ironically, in June 2018, Wells Fargo banned its customers from using their credit cards to purchase cryptocurrencies, as reported by CCN. The ban was enacted just as the bitcoin bear market was going into overdrive.
In a statement, Wells Fargo cited the "multiple risks associated with this volatile investment" for his decision.
"Customers can no longer use their Wells Fargo credit cards to buy cryptocurrency," a bank representative said in a statement. "We are doing this to be consistent in the Wells Fargo company because of the multiple risks associated with this volatile investment".
Many in the crypto community say that this latest banking scandal is another example that highlights the epic failure of centralized financial institutions.
Between this and the latest interest rate hike in the Federal Reserve (the fourth in 2018), bitcoin evangelists say it is time to empty corrupt legacy banking systems.
Wells Fargo is paying over $ 500 million to stop all 50 states questioning their nefarious activities.
The small penalty given to the bank yielded $ 88 billion in revenue last year.
Long Bitcoin, Short the Bankers!
– Pomp 🌪 (@APPLANT) December 28, 2018
– Cyber Lion (@CyberLionWeekly) December 28, 2018
The $ 575 million Wells Fargo facility ends with 50-state suits for fake accounts. Clearly the "adult" legacy industry, set incredibly by countless government offices and agencies, should be replaced by an external cryptography to the system: #BitcoinCash #BCH
– CoinSpice (@CoinSpice) 29 December 2018
Shutterstock foreground image.
Get an exclusive cryptographic analysis by professional traders and investors on Hacked.com. Register now and receive the first month for free. Click here.