Anyone who has ever been a customer of Wells Fargo knows just how horrific their customer service can be. They have seen the horror stories of lies, deception, and theft through the fine print and illegal actions of the corporation. Yet customers keep signing up for accounts, lines of credit, credit cards, and other services from them.
Now, for the over 16 million consumers who were defrauded by the company, they have a $3.7 billion judgment due to their “widespread mismanagement” that resulted in “illegal activity” over many years. Focused primarily on their repeatedly misapplying loan payments, wrongfully foreclosing on people’s homes, illegally repossessing vehicles, incorrectly assessing fees and interest, as well as nailing customers with surprising overdraft fees, this represents an acknowledgment of their wrongdoing.
Surprisingly, the hidden fees for savings accounts or not having enough direct deposits were not mentioned in the briefing. These fees tend to impact lower-income, and military account holders the most. Targeting both active duty servicemembers as well as veterans, these accounts would hammer members multiple times for not having enough funds in the account, then an overdraft fee for going down below zero as the fee was more than the minimum to avoid it. Then, it compounded itself again.
Ordered by the Consumer Financial Protection Bureau (CFPB), the judgment adds to a previously assessed $2 billion already imposed for other “illegal activity.”
In a statement, Rohit Chopra, the CFPB’s director explained that Wells Fargo received the judgment and made it clear that they had no remorse. “Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families.” Going on to call them “repeat offenders” and a “corporate recidivist”, he admitted they are not out of the woods with investigators yet, as this is just an “initial step.”
During a follow-on call with reporters, Chopra clarified that Wells Fargo has not yet moved past their problems, and the CFPB’s work is not even close to being done.
Beginning in 2016, the scandal of how Wells Fargo treated customers, as well as employees, triggered Congressional hearings. Not to mention the countless regulatory probes that led to the removal of not one, but two CEOs. Janet Yellen’s final act as the chair of the federal reserve was to try and destroy Wells Fargo with sanctions that are still in place today.
The $2 trillion is broken down with $1.3 billion alone going to people damaged by their auto lending tactics. These actions destroyed the credit and banking of thousands of Americans. $500 million will go to those impacted by surprise overdraft fees, and $200 million to those hit with their mortgage servicing accounts. Going forward refunds of car loan fees and they must stop with the surprise overdraft fees.
Making changes like this will help, but at this point, Wells Fargo is the Spirit Airlines of the banking world. The only people doing business with them are those who are unable to go to a better bank. Even the Bank of America staff is left scratching their heads at this level of deceit and deception. The only way to save this storied institution is to completely dismantle the leadership and rebuild.
Problem is, everyone they would bring on to replace them has already been with or very close to the company and has already poisoned themselves, so the cycle of deception and deceit continues. Then again, the banking industry has gone from a safe place to store our money to nothing more than a recipe to steal from the American consumer thanks to FDR and then Nixon taking us off the gold standard in a long two-part plan that destroyed Americans.