The Los Angeles City Attorney and Consumer Financial Protection Bureau fined Wells Fargo US$185 million for creating fake bank accounts to meet their sales targets. The incident presented a convincing case for Bitcoin and its ability to grant users complete control over their money.
Wells Fargo, officially the world’s largest bank at US$254 billion market cap, recently released more than 5,000 employees for creating fake bank accounts to increase the company’s sales. To satisfy their sales goals, employees created a staggering 2 million fake bank accounts and then moved customer’s money around in an attempt to prove its legitimacy.
The movement of customer’s funds from these fake bank accounts led to a series of substantially high overdraft fees, which are one-time fees charged by the bank for each bank account, if, and when, an account balance reaches below zero. After the incident, millions of Wells Fargo customers each received around US$140 in overdraft fees, along with other fees and charges which the bank plans to disclose once the investigation closes.
Are company executives penalized?
John Stumpf, Wells Fargo CEO, who made around US$19.3 million in compensation alone in 2015, and other company executives weren’t held accountable for the incident.
While 5,300 Wells Fargo employees were immediately released after the fraudulent operation was publicized, bankers of the year, Stumpf, and his predecessor, Dick Kovacevich, were protected by the company which led to an outrage of criticism from experts and those in the financial community.
Eric Schiffer, TV personality and Two inc. CEO, stated:
Stumpf should be fired for the Wells Fargo horror show. It led to bullets piercing Wells like a suicidal wild west gunslinger in action.— Eric Schiffer (@ericschiffer) September 8, 2016
Merit of Bitcoin
Unlike popular banking systems, Bitcoin offers full control of money to its users. That means investors and traders who hold Bitcoin in a wallet platform will have full control over their funds, eliminating the possibility of a central authority or a network administrator moving the funds around certain accounts without the user’s permission.
The entire incident involving Wells Fargo and its customers could have been avoided if the customers hadn’t granted the bank complete control over their money and the rights to move their funds.
As today’s banking systems and mechanisms become exposed, a more convincing case for Bitcoin and its decentralized nature is being presented to mainstream users.