Wells Fargo Is At It Again, Fleecing Its Customers In The Foreign Exchange Market
As we see the battle engaged over who will at least temporarily run the CFPB, an agency designed to protect consumers from the predatory behavior of Wall Street, it is now reported that Wells Fargo is at it again, this time fleecing institutional accounts in the foreign exchange market.
Wells Fargo’s latest scam was charging fees on foreign exchange transactions that were far higher than what the bank and the customer had initially agreed upon. In some cases, the higher fees actually ended up creating a loss for the unsuspecting customers. Among the companies burned were Ecolab, Veritas Technologies, Restaurant Brands International, CenturyLinkInc., Federal-Mogul Holdings Corp., and even nonprofit groups such as the National Bone Marrow Donor Program.
Many of these transactions were large currency trades or swaps so even a slightly higher fee than agreed to could generate tens or even hundred of thousands of extra dollars for the bank. As an example, just one Restaurant Brands trade ended up costing the company an extra $900,000 dollars which the bank refunded to the company after it complained.
Of course, the traders and sales people in the foreign exchange group were paid cash bonuses based on their revenue generation, encouraging them to gouge their own customers. And it was common knowledge within the bank that this theft was going on. Whistleblowers knew they would be ignored and fired. None of this is new for Wells Fargo.
It probably should also be mentioned that this thievery was going on while a major class action suit against the big foreign exchange dealers for inflating fees was ongoing. This class action involves years of overcharging customers in the foreign exchange markets going back as far as 2003. You would think that, knowing there was already an intense focus on foreign transaction fees, the bank would make sure that it was not overcharging its customers. But no, not at Wells Fargo.
I don’t have the time or the energy anymore to rehash the litany of thievery that the bank has engaged in for the last decade and a half. Suffice it to say, it is a long and varied history that often looks more like a criminal enterprise than a bank. At least this time, it was only a few hundred customers that were robbed as opposed to the millions that Wells has ripped off in the past. And to think that Wells was considered the most well run bank at the time of the financial crisis. You can only imagine what the others might be like. And now they won’t even have to worry about the CFPB anymore.
