Wells Fargo bank will pay $3.7 billion for abusing customers

the american bank Wells Fargo will have to pay more than 3,700 million dollars in fines and refunds to customers to resolve a series of complaints for alleged malpractice and consumer abuse, the country’s authorities announced Tuesday.

The entity based in San Francisco (California, USA) must compensate those affected with more than 2,000 million dollars and pay a fine of 1,700 million, the Consumer Financial Protection Office (CFPB) reported in a statement. for its acronym in English).

LOOK HERE: Pacific Control: opening in Hong Kong aims to double its sales

According to regulators, Wells Fargo – which in recent years has been involved in several scandals linked to its business practices – illegally charged fees and interest on loans and unjustified charges on bank accounts that affected millions of customers.

The bank, the fourth in the US by assets, had already been penalized on several occasions for consumer abuse, although never with such high amounts.

The director of the CFPB, Rohit Chopra, highlighted in a note that Wells Fargo is “recidivist” and said that the punishments announced today represent a “important initial step” so that he is accountable.

According to this federal agency, the entity committed violations for years with several of its main products, including mortgage and car loans and bank accounts.

In the case of financing for the purchase of vehicles, for example, Wells Fargo charged unjustified fees, incorrectly processed payments and illegally repossessed cars, damaging more than 11 million accounts with damages of about $1.3 billion, according to the CFPB.

Meanwhile, for years the bank inappropriately denied mortgage modifications, leading customers to lose their homes, and charged surprise fees for debit card transactions and cash withdrawals by claiming customers did not have enough funds when in fact they did. they had them.

It’s a statement, Wells Fargo confirmed the agreement reached with the authorities to resolve these complaints and assured that it is an important step to transform the practices that the entity had for years.

“We and the regulators have identified a number of unacceptable practices that we have been systematically working to change and compensating clients where warranted”said CEO Charlie Scharf.

Wells Fargo has been repeatedly sanctioned in the US for abusing consumers since it emerged in 2016 that it opened millions of accounts illegally, a practice that many employees used to meet the goals the bank set for them.

That scandal led the US Federal Reserve (Fed) to limit the expansion of the entity after verifying a “pervasive and persistent misconduct.”

“Over the past three years we have made significant progress and today we are a different company,” the top executive said today.

After the notification was released, Wells Fargo shares on Wall Street rose around 1%, although those gains later moderated.

Source: EFE