Wells Fargo (NYSE:WFC) will now pay $35 Million for overcharging millions of dollars to customers for excessive fees in investment advice.
The Securities and Exchange Commission (SEC) claims that Wells Fargo collected an additional $26.8 million in advisory fees after overcharging more than 10,900 customers.
The SEC says the overbilling took place when certain financial advisers from Wells Fargo along with the firms acquired by the lender agreed to reduce the standard advisory fees for some of the banking giant’s customers.
Although the agreement was put into writing at the time the customers’ accounts were opened, Wells Fargo failed to make the changes in its billing systems, reports DH.
“The SEC also claims that the banking giant did not establish measures or policies that could have prevented the overbilling.
According to the SEC, Wells Fargo overcharged some customers who opened their accounts before 2014 through December 2022.”
Gurbir S. Grewal, Director of the SEC’s Enforcement Division made the following statement:
“For years, Wells Fargo and its predecessor firms negotiated reduced advisory fees with thousands of clients, but failed to honor them, overcharging those clients millions of dollars as a result. Today’s enforcement action underscores the need for firms growing their businesses through acquisition to ensure that their growth does not come at the expense of client protection…
Investment advisers must adopt and implement policies and procedures to ensure that they honor their agreements with all of their clients, including legacy clients of predecessor firms.”
Wells Fargo has agreed to pay a $35 million civil penalty without admitting or denying the charges.
The bank also paid $40 million, including interest, to reimburse customers who paid the additional advisory fees.
Other Wells Fargo News Today
Wells Fargo froze new deposits in what seems to be one of its most painful scandals, affecting customers nationwide.
For the second time this year, Wells Fargo acknowledged that deposits were not showing up in customers’ accounts.
In an emailed statement Friday morning, a Wells Fargo representative said the issue was affecting a “limited number of customers,” and that “the vast majority” of instances had been resolved before noon, while the “few remaining” would be resolved soon.
Jeani Cortez, a single, disabled, self-employed accountant and Alaska resident, says she was supposed to have paid her rent, gas, electric and internet payments for the month by now with funds she deposited Wednesday.
She said she was told Friday by a Wells Fargo representative that she would not be able to access her deposit for another three to five business days. She’d earlier been told that Wells Fargo could send her a letter to give to her creditors; that too has not arrived.
“There is simply not enough funds (without that deposit) to cover them all,” she wrote in an email, adding: “I simply cannot live without my funds now.”
For Brent Morrison, a Texas resident and father of two, the Thursday outage was doubly painful: He was laid off less than two weeks ago.
“That money was a little bit important to me yesterday,” Morrison said in a phone interview Friday.
While the funds — approximately $2,000 — ultimately did appear in his account, Morrison said he’d also been affected by the March outage, so he is now looking to move his money to a local bank, he said.
“They lost a customer. I just have no choice,” Morrison said. “It just doesn’t make sense to continue with them. The words ‘banking’ and ‘confidence’ shouldn’t end in a question mark.”
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