US bank Wells Fargo has agreed to a $3 billion settlement to resolve a government investigation into its sales practices.
Wells Fargo agreed to a $3 billion settlement to resolve cases regarding its sales practices, including opening millions of fake customer accounts. The bank admitted to sales misconducts, including wrongly collecting millions of dollars in fees, misusing customer information and harming the credit rating of customers.
The settlement comes after around four years since the scandal hit the company, which has led to the resignation of two chief executive officers (CEOs) and large fines. Since 2018, Wells Fargo has been operating under a US Federal Reserve order, limiting its growth.
In January, Former Wells Fargo CEO John Stumpf agreed to a lifetime ban from the banking industry and a $17.5 million fine. Around $4 billion in fines have already been paid out by the company from the wide-ranging sales schemes.
According to the US Office of the Comptroller of the Currency, it also fined seven other former Wells Fargo executives with about $40 million in connection to what it described as “the bank’s systemic sales practices misconduct.”
Current CEO Charlie Scharf called the settlement a “significant step in bringing this chapter to a close”. He said: “There’s still more work we must do to rebuild the trust we lost.”
“The conduct at the core of today’s settlements – and the past culture that gave rise to it – are reprehensible and wholly inconsistent with the values on which Wells Fargo was built,” Scharf added.
The firm admitted that its employees opened millions of fake bank and credit card accounts to meet its unrealistic sales goals.
The bank also admitted that its actions forced borrowers to pay for auto insurance they didn’t need, which led to auto borrowers ultimately having their vehicles repossessed. Wells Fargo also admitted to illegally repossessing the vehicles of hundreds of service members.