Wells Fargo bank was fined $185 million by federal regulators last week over a widespread scam by employees who created millions of fake accounts with real customers' money to earn sales bonuses. On Tuesday, the company announced it was ending product sales goals for retail bankers. File Photo by Vividrange/Shutterstock
SAN FRANCISCO, Sept. 13 (UPI) -- Wells Fargo & Co. eliminated product sales goals for its consumer bankers Tuesday, one week after the company was fined $185 million for a widespread scam by employees opening bogus accounts.
"Our objective has always been and continues to be to meet our customers' financial needs and drive customer satisfaction," CEO John Stumpf said in a statement. "We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers."
The federal Consumer Financial Protection Bureau announced the penalties Thursday after an investigation uncovered illegal activity by thousands of employees that included opening fake accounts and adding services in customers' names. Wells Fargo fired more than 5,300 employees involved in the scheme to meet quotas and generate sales bonuses.
"The key to our success is the lifelong relationships that result from providing each customer with great value" said Stumpf. "For the past several years, we have significantly strengthened our training programs, controls and oversight and have evolved our model to ensure we are rewarding deeper relationships and providing excellent customer service. The elimination of product sales goals represents another step to reinforce our service culture, helps ensure that nothing gets in the way of our ability to achieve our mission, and is consistent with our commitment to providing a great place to work."
Wells Fargo & Company has $1.9 trillion in assets and approximately 268,000 employees.
As part of the agreement, the bank must also hire an independent consultant for a thorough review of its procedures, including employee retraining and reform of the bank's performance-based policies.
The CFPB ordered Wells Fargo to pay $100 million and the Office of the Comptroller of the Currency, another federal regulator, issued a $35 million fine. The city and county of Los Angeles will receive $50 million from the bank.
Wells Fargo also agreed to pay full restitution, totaling about $2.5 million, to all of its customers whose identities and money were involved in the scam.
Employees opened more than 2 million fake accounts in real customers' names, and transferred money without the customers' knowledge.
Employees also applied for credit cards for more than 500,000 existing customers without their knowledge or consent, the CFPB said. They also enrolled them in banking services and activated debit cards.
The U.S. Senate Banking Committee plans a hearing Sept. 20 on the matter.