Wells Fargo’s Foreign Exchange Bankers Overcharged Tons of Customers
According to employees of the bank who spoke to the Journal, an internal review showed that only 35 of around 300 fee agreements agreed by the foreign-exchange operation had been charged accurately.
The findings about excess foreign-exchange charges applies only to deals with business customers. However, the bank is still recovering from a scandal in its retail banking division: in order to hit bonus targets, some employees opened accounts for customers without authorization, or invented customer details. The bank estimates that up to 3.5 million unauthorized accounts may have been opened.
Wells Fargo (WFC) is the only major bank in the U.S. to award bonuses to currency traders based solely on how much revenue they bring in, the Journal reports, a factor that may have incentivized overcharging customers. The bank said it has begun making changes to its compensation plan.
In addition to the internal audit that led to these revelations, Wells Fargo’s foreign-exchange division is under investigation by federal law enforcement organizations including the Federal Reserve and the U.S. Attorney’s Office for the Northern District of California.