Wells Fargo To Pay $575 Million Fine For Scamming Customers Shortly After Tagging Bitcoin As Too Risky

The third largest bank in the United States, Wells Fargo, has been ordered to pay a fine of $575 million after its management agreed that it systematically scammed its customers for up to 15 years. The news about the fine comes a few months after the financial giant said Bitcoin is too risky to be recognized as an investment. The fine order was declared following a nationwide investigation that was concluded with the bank admitting to fraud. The bank opened over 3.5 million credit card and bank accounts that were all unauthorized using the names of their customers. The duration of the scam was 15 years from 2002 to 2017.

Illegal Charges Get Fined

After opening the unauthorized accounts using real customer names, the bank charged these customers for products that they never requested like life insurance, collateral protection insurance, auto loan, etc. Employees of the bank claimed that they agreed to commit this fraud for fear of losing their jobs. The fine will be distributed to all the 50 states in the US as well as the District of Columbia. Also, the bank has been ordered to start a consumer restitution review program through which it is to reimburse all those who were illegally charged.

Bitcoin (BTC) Price Today – BTC / USD
NamePrice24H %

The first time the bank’s fraudulent practices came to light was in 2016. It led to the CEO, John G. Stumpf’s, resignation. Since 2016, the bank has been slapped with over $2 billion in fines. Even at that, the bank is still facing ongoing investigations by the United States SEC as well as the Department of Justice and Labor.

The attorney general of the California district, Xavier Becerra called out Wells Fargo for its violation of these consumer protection laws. In a statement released on the 28th of December, Becerra said that the bank has undermined the confidence consumers have in the banking system through its breach of trust. In his words:

“Rather than safeguarding customers, Fargo has exploited them by signing up for products and services from consumer bank accounts to insurance that they do not want.”

The breach of trust doesn’t just threaten the trust customers have in Wells Fargo but it undermines the entire banking system. The action by the bank is disgraceful and unlawful.

Wells Fargo Says Cryptocurrencies Are Too Risky

In June 2018, Wells Fargo banned all its customers from dealing with cryptocurrencies using their credit cards. This was just when the bearish pressure in the cryptocurrency market was increasing. The bank claimed that the ban was enacted because BTC is too volatile and risky to be an investment option. Part of the report was as follows:

“Our customers are no longer allowed to use our credit cards to buy cryptocurrencies. We are trying to make sure Wells Fargo is consistent because cryptocurrency investments are high risk.”

The action by Wells Fargo supports the notion that centralized financial institutions are fundamentally flawed. Cryptocurrency and blockchain experts have said that it’s time to get rid of these centralized institutions and replace them with decentralized ones. While it’s going to take some time for blockchain technology to reach mass adoption, it is definitely going to fix some of the problems that plague today’s financial system.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.