Arthur J. Villasanta – Fourth Estate Contributor
San Francisco, CA, United States (4E) – California-based Wells Fargo & Company, the world’s second-largest bank by market capitalization, has gone from being the only AAA-rated bank in the United States to one synonymous with unrelenting customer abuse.
The notorious Wells Fargo account fraud scandal of 2016 continues to stain the bank’s reputation to this day. This infamous deception saw bank employees open at least 3.5 million unauthorized bank and credit card accounts. Wells Fargo then charged customers for mortgage fees they didn’t deserve and forcing them into car insurance they didn’t need. Some clients had their cars repossessed.
The bank’s already tarnished reputation was further sullied in April when Wells Fargo was fined over $1 billion for years of forcing customers to buy car insurance they didn’t want and charging mortgage borrowers unfair and higher fees. This latest in an unending string on customer abuses by Wells Fargo was revealed by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency, which will also impose the record fines on Wells Fargo.
The government said Wells Fargo charged more than 570,000 clients for car insurance they didn’t need. It said that 20,000 of those customers defaulted on their car loans because of this unlawful action, and had their vehicles repossessed because of unnecessary insurance costs.
Wells Fargo did it again in July he bank admitted it illegally billed thousands of customers for “add-ons” such as pet insurance they didn’t know about.
Wells Fargo charged monthly fees for these add-on products such as pet, car and home insurance and legal services, among others, and is now being investigated by the CFPB. Government probers want to determine if Wells Fargo customers were deceived; were aware of the products and charges and had the ability to cancel them.
Another scandal revealed in August saw Wells Fargo claiming it was “very sorry” for a computer glitch that caused hundreds of people to have their homes foreclosed on.
These new scandals show Wells Fargo’s new management is still up to the same old tricks intended to defraud and deceive its customers. During the account fraud scandal of 2016, the bank stopped referring to the people that banked with it as “clients” it was supposed to help. It referred to people that entrusted their money to its care as “customers” to be bilked out of as much money as it could.
Federal regulatory bodies, including the CFPB fined Wells Fargo a combined $185 million because of its illegal activity. Wells Fargo also faces additional civil and criminal suits.
Repeated episodes of customer abuse have finally hurt the bank’s bottom line. Profit growth has stalled and looks set to tank.
“Wells Fargo is still trying to sweep up broken glass — but they’re finding it all over the place,” said William Klepper, a management professor at Columbia Business School. “The problems are far more pervasive than in just retail banking.”
Article – All Rights Reserved.
Provided by FeedSyndicate