Wells Fargo to Pay $50 Million to City and County of Los Angeles
By now, you may have heard about the shocking scandal involving Wells Fargo Bank. The company has fired more than 1 percent of its global workforce (5,000 people) for a wide-ranging scheme in which employees opened new accounts for customers without permission in order to game the company’s employee incentive system.
Here’s how it worked:
Wells Fargo offered a number of generous benefits to employees who met the company’s aggressive sales goals. That created a ruthless atmosphere in which thousands were apparently willing to lie and cheat in order to score bonuses, promotions and other rewards. According to authorities, two million fake accounts were opened for existing customers without their knowledge.
Tons of people and entities are going to be on the receiving end of this, including the county and city of Los Angeles, which filed a lawsuit against Wells Fargo in 2015. In addition to the $100 million it owes the Consumer Financial Protection Bureau, the $35 million it owes the Office of the Comptroller of the Currency, and untold figures owed to affected customers, Wells Fargo must also pay $50 million to the city and county of Los Angeles. It is the largest fine the CFPB has ever levied against a financial institution and the largest in the L.A. City Attorney’s Office’s history.
Read more about scandal here.