LOS ANGELES (AP) — Wells Fargo agreed Friday to pay $3 billion to settle criminal and civil investigations into a long-running practice whereby company employees opened millions of unauthorized bank accounts in order to meet unrealistic sales goals.
Since the fake-accounts scandal came to light in 2016, Wells has paid out billions in fines to state and federal regulators, reshuffled its board of directors and seen two CEOs and other top-level executives leave the company. Wells Fargo’s reputation has never fully recovered from the sales scandal, even four years later.
The $3 billion payment includes a $500 million civil payment to the Securities and Exchange Commission, which will distribute those funds to investors who were impacted by Wells’ behavior.
“Wells Fargo traded its hard-earned reputation for short-term profits” said U.S. Attorney Nick Hanna for the Central District of California.
Before the scandal broke, Wells Fargo was considered to have a sterling reputation among the big banks. Bank executives referred to its branches as “stores,” and once had a policy of trying to get each Wells Fargo customer to have eight financial products with the company.
Behind the scenes, Wells’ top management was pushing sales goals that were both aggressive and unrealistic. Bank employees were berated for not making bloated quotas, leading sometimes to mental health breakdowns, and ultimately resulting in many employees gaming Wells Fargo’s sales system in order to meet the targets. For example a number of Wells Fargo customers, notably the elderly, were signed up for online banking when they did not have internet access.
The behavior by Wells’ employees caused damage to customers’ credit scores and cost some of them money in fees.
The documents that lay out the…