Wells Fargo to pay $37.3M in fines for overcharging some customers
NEW YORK - Wells Fargo has agreed to pay more than $37 million in fines to settle a lawsuit with the U.S. Department of Justice regarding allegations that the bank fraudulently overcharged its customers who used its foreign-exchange services.
In court documents, the federal government alleged that between 2010 and 2017 Wells Fargo defrauded 771 customers, many of them small or medium-sized businesses or federally-insured institutions, by charging them more than what the bank claimed for foreign exchange transactions.
"Through this brazen and wide-ranging fraud, Wells Fargo was able to secretly obtain tens of millions of dollars from the Customers to which the Bank was not entitled," court documents said.
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The DOJ also accused Wells Fargo of creating a workplace where "defrauding or otherwise taking advantage of customers became normal business practice."
The lawsuit was filed in the U.S. District Court, Southern District of New York.
In addition to the fines, Wells Fargo has paid out more than $35 million in restitution to customers, according to court documents. Money will also be paid to a whistleblower, Paul Kohn, who used to work for the company. According to Reuters, he will receive $1.6 million.
FOX Television Stations reached out to Wells Fargo for comment, but did not immediately receive a response.
Shares of the company closed down 36 cents, or 0.8%, at $47.56 Monday evening.
This isn’t the first lawsuit settlement regarding the bank. In February 2020, Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations into a long-running practice whereby company employees opened millions of unauthorized bank accounts in order to meet unrealistic sales goals.
Since the fake-accounts scandal came to light in 2016, Wells Fargo has paid out billions in fines to state and federal regulators, reshuffled its board of directors and seen two CEOs and other top-level executives leave the company.
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The bank has been entangled in numerous scandals the past few years and is still operating under an order from the Federal Reserve that keeps Wells from growing any larger. Sen. Elizabeth Warren of Massachusetts issued a letter calling for Wells Fargo to be broken up, citing the bank’s inability to resolve its problems.
The Associated Press contributed to this report. This story was reported from Los Angeles.