- Identify external forces that affect businesses
- Understand how external forces affect businesses
Wells Fargo Fined — Again!
The Consumer Financial Protection Bureau fined Wells Fargo $1.7 billion in 2022 for illegal activity that included inaccurately recording loan payments made by customers, wrongfully foreclosing on homes, illegally repossessing vehicles, and incorrectly charging fees. The bank was also ordered to reimburse customers for more than $2 billion.[1]
This misconduct follows another scandal that got a lot of attention in 2016 when it was revealed that managers at the bank pressured employees in meet unrealistic sales goals. This resulted in thousands of employees opening accounts for customers either without permission or under false pretenses, often by creating false records and using customers’ information without permission. As a result, Wells Fargo agreed to pay $3 billion to settle all legal liability for the fraudulent activity that happened over a period of 14 years.[2]
Scandals like these hurt not just the business’ reputation but also its stock price.
- Egan, Matt. “Wells Fargo Ordered to Pay $3.7 Billion for ‘illegal Activity’ Including Unjust Foreclosures and Vehicle Repossessions.” CNN, December 20, 2022. https://www.cnn.com/2022/12/20/investing/wells-fargo-cfpb-foreclosure-fine/index.html. ↵
- Office of Public Affaris. “Wells Fargo Agrees to Pay $3 Billion to Resolve Criminal and Civil Investigations into Sales Practices Involving the Opening of Millions of Accounts without Customer Authorization.” USDOJ, February 21, 2020. https://www.justice.gov/opa/pr/wells-fargo-agrees-pay-3-billion-resolve-criminal-and-civil-investigations-sales-practices. ↵
Foreclosure is the legal process a lender like a bank uses to take back a property after the borrower fails to make required loan payments.