Wednesday, 05 October 2016 04:09

U.S. Legislators Grill Wells Fargo CEO for “Identity Theft”

Written by 
Rate this item
(0 votes)

John Stumpf , the CEO of Wells Fargo, was called before the United States Congress to answer questions about the bank's breach of the public trust via activities characterized as fraud and identity theft.

The grilling of Stumpf followed a fine of $185 million imposed in September 2016 on the bank for its practice of opening fee-generating accounts without authorization from customers. Bank employees were instructed to cross-sell account products aggressively to meet high sales objectives, and fake accounts were opened using the personal data of customers without their knowledge. In some cases, customers' credit ratings dropped when they failed to make payments on credit accounts they did not know they had.

Representative Maxine Waters, ranking Democrat on the House Financial Services Committee, said that the bank's abuse of the public trust was "some of the most egregious fraud we have seen since the foreclosure crisis." She went on to compare the actions to “mass identity theft.”

To date, Wells Fargo has lost over $20 billion of its market value, and the State of California ha suspended all state business previously done with the bank for one year. The U.S. Department of Labor has announced it will make an exhaustive review of the bank to ensure it had not violated any wage laws by failing to compensate sales employees who were forced to meet the high sales quotas. And the Securities and Exchange Commission is also pondering whether to conduct an investigation into whether Wells Fargo misled its investors.

A group of former Wells Fargo workers has filed a $7.2 billion lawsuit against the bank, claiming they were dismissed from their jobs for blowing the whistle on there practices.

Resources

“Wells Fargo CEO Roasted on Capitol Hill for 'Egregious Fraud', 'Identity Theft',” Lucy Bayly, NBC News

 

Read 1293 times
Login to post comments