Wells Fargo Sued For $37 Million!

Wells Fargo has to pay $37 million to the government for alleged fraud! Check out the video to learn why!

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Wells Fargo have to pay $37 million to settle the lawsuit put forth by the government that alleges Wells Fargo defrauded 771 small and medium sized businesses and banks. According to the lawsuit, Wells Fargo told these businesses with foreign exchange transactions (aka FX transactions) that it was charging them fixed rates but meanwhile they incentivized salespeople to overcharge FX customers and allegedly concealed these overcharges.

These incentives created a culture at Wells Fargo where people salespeople were comfortable repeatedly defrauding the bank's customers.

There’s a blurred line between cutthroat capitalism and outright fraud. But let’s take a step back. If you look at any of the big banks like Chase or Bank of America, if you take a look at their income statement, check to see where the bulk of their money comes from.

They make the most money from the people with $100 or $200 in their bank accounts. The wealthy clients get their fees waived and all sorts of nice treatment. The banks do this because the wealthier clients probably bring them more clients and this is what allows a bank to operate.

But the banks make more money off all of the overdraft and other fees they charge the “regular” accounts. This means that it is already embedded into the bank culture that you are going to overcharge and overfee someone. Eventually, you grow desensitized and forget that this may not be ethical.

This is exactly what the problem may be with these types of establishments. If you could simply move your lower-end customers into the direction where they can own assets, you can fee them on things like interest versus pushing people further and further into excessive debt.

Banks should be more responsible with the power that they have. And it’s not only the little guy but the little businesses too. It is time that someone holds Wall Street and these banks accountable.

Do you think banks should revisit how they conduct their business? Let us know in the comments below.

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