Wells Fargo Tipped Off Before Inspections

Wells Fargo’s fake account scandal was able to go on for so long partly because bank branches were given notification ahead of visits from Wells Fargo’s internal monitors who would do inspection of branches.

According to a report in The Wall Street Journal citing current and former employees and executives at the embattled bank, managers and employees at the branches usually got a 24-hour or longer warning about the reviews, giving many employees time to cover their tracks from opening up accounts without customers’ permissions. Greater than a dozen current and former employees of Wells Fargo branches in California, Arizona and New Jersey told the WSJ they saw or forged signatures on documents and shredded papers to make it appear as if customers signed off on the account openings. The paper noted that managers had employees stay late to shred documents or put fake signatures on them.

A Wells Fargo spokeswoman said the bank has increased oversight since the scandal emerged and increased monitoring and accountability to prevent a scandal such as this from happening again. Some of the things the bank did includes investing millions in employees, third party mystery shoppers, unannounced branch inspections and more internal auditor visits.

In September, the Consumer Financial Protection Bureau (CFPB) announced that Wells Fargo agreed to pay a $185 million fine and refund $5 million in fees that the bank wrongly charged customers. According to an investigation by the CFPB, Wells Fargo employees not only made fake deposit accounts but also submitted 565,443 unauthorized credit card account applications on behalf of unknowing customers. It’s estimated that 14,000 of those accounts accrued $403,145 in fees. Through its own independent investigation, the bank discovered a total of $2.6 million in unauthorized fees.