Wells Fargo to pay $3-billion to settle fake account scandal
Bank workers opened millions of fraudulent accounts
SAN FRANCISCO, Calif. (KYMA, KECY) - Wells Fargo has agreed to pay a $3-billion settlement to settle a civil lawsuit and resolve criminal prosecution for its fake account scandal.
Thousands of Wells Fargo employees opened millions of savings and checking accounts in the name of actual customers without their knowledge or consent. The scheme lasted more than ten-years. The bank has faced a flood of lawsuits since the fraudulent accounts became public in 2016.
Prosecutors say the bank took a variety of steps to hide its workers actions, including forging signatures, and preventing other employees from conducting customer satisfaction surveys about the accounts.
None of the money from Friday's settlement will be used to compensate victims. Wells Fargo has made separate efforts to pay victims for potential losses.
As part of the settlement, the bank admitted to pressuring employees to sell large volumes of new products to existing customers as a way of generating more business. Workers called the practice "gaming." It included opening accounts without a customer's knowledge, issuing credit and debit cards, and moving money from legitimate accounts to fraudulent ones.
The Justice Department has agreed not to criminally prosecute the bank during the three-year term of the agreement, providing Wells Fargo continues to cooperate with government investigations.
The settlement applies only to the bank, not to the individuals responsible for the fraud. Last month Well Fargo's former chief executive, John Stumpf, was fined $17.5-million for his role in the scandal.
