Wells Fargo Inc. (NYSE: WFC) will pay USD 575 Million in a settlement in regards to the company opening fake accounts without the knowledge of customers, as per NBC. Under the agreement, the bank will create teams to review and respond to customer complaints about its banking and sales practices.
According to NBC, the bank has been under scrutiny since 2015, when it acknowledged that employees had opened millions of fake bank accounts for customers in order to meet goals. The company also noted that it sold auto insurance and other financial products to customers who didn’t need them. Wells Fargo was already walking a thin line, with the company having been ordered to pay more than USD 1.2 Billion in penalties.
Chief Executive Officer Tim Loan said in a statement “This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank.” He apologized for the companies actions during a congressional hearing in 2017, however the backlash from the companies decision still lingers. The company plans to lay off up to 10% of its workforce over the next three years.
California Attorney General Xavier Becerra called the bank’s behavior ‘disgraceful’. She also said “Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future. Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products – from bank accounts to insurance – that they never wanted. This is an incredible breach of trust that threatens not only the customers who depend on Wells Fargo, but confidence in our banking system.”
Wells Fargo is attempting to build back consumer confidence in the upcoming years.