Wells Fargo agreed to pay $3 billion to settle charges that the bank engaged in fraudulent sales practices for more than a decade, NPR reports. The company collected millions of dollars in fees for bank accounts, debit cards and other products that customers neither asked for nor needed. The illegal practices were carried out by thousands of Wells Fargo employees to meet unrealistic sales targets. The $3 billion penalty is appropriate, “given the staggering size, scope and duration of Wells Fargo’s illicit conduct,” added Andrew Murray, a U.S. Attorney in North Carolina. Authorities say bank managers were aware of the illegal conduct as early as 2002 but allowed it to continue until 2016.
The Justice Department says a cornerstone of Wells Fargo’s business model during this period was a “cross-sell strategy,” in which customers were encouraged to open additional accounts and buy other products. To meet onerous sales targets, prosecutors say employees often opened accounts without customers’ knowledge or consent, forging signatures, moving money from existing accounts and altering customers’ contact information to avoid detection. None of the $3 billion penalty will go to Wells Fargo customers. Most of the fine will go to the U.S. Treasury, while $500 million goes to the Securities and Exchange Commission to be distributed to investors. The settlement does not preclude additional action against individuals who took part in the illegal scheme.