According to federal regulators, the fraud has been going on since 2011, without customer knowledge. "Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the CFPB, said in a statement.
Wells Fargo has confirmed that it has fired 5,300 employees over the last few years, in connection with the scam.
The scale of the fraud is enormous, with more than 1.5 million unauthorized deposit accounts opened by Wells Fargo employees since 2011.
Regulators state that employees transferred customers’ funds from legitimate accounts to newly-created ones without customer knowledge or consent. The CFPB described this practice as "widespread." Wells Fargo customers were then being charged fees for insufficient funds or overdrafts, because they didn’t have enough money in their legitimate accounts.
Making matters worse, the Wells Fargo employees also submitted applications for 565,443 credit card accounts, all without their customers' knowledge or consent. Some 14,000 of those accounts earned over $400,000 in fees for the bank, including annual fees, interest charges and overdraft-protection fees, CNN Money reported.
The CFPB said Wells Fargo will pay "full restitutions to all victims." In addition to the $185 million in fines, the largest amount the agency has ever charged, the bank will refund $5 million to its affected customers.