The Wells Fargo Company is in the process of refunding tens of millions of dollars to customers for fees charged over the years for services that they, the customers, had not fully understood nor agreed to. These are euphemistically known as “add-on products.”
The Wells staff found a clever way of “selling-up” certain products in order to add to the company’s bottom line as well as to enhance their careers by chalking up increased sales. In other words, they found all sorts of ways to add additional “services” to customers’ monthly accounts – the only problem was that customers hadn’t agreed to the extra services. That constitutes a big problem – in some circles, people would call that fraud. In fact, that was the concern of the Office of the Comptroller of the Currency (OCC) when they fined the bank $1 billion dollars in April, 2018 for their failure to “manage risk.” The OCC action followed on an unprecedented action by the Federal Reserve in February, 2018 to cap the size of the bank’s balance sheet due to risk management failure. But, in all fairness, as much as we might be inclined to beat our breasts in indignation over these egregious practices, both Citigroup and Bank of America paid more than $700 million each for the practice of “add-on products” that they pursued in 2014 and 2015. So far, Wells has arranged to pay out $619 million.