It's one of those days when everything is happening at once. The US Consumer Financial Protection Bureau yesterday issued Wells Fargo with a $100 million fine and ordered the US giant to pay restitution to customers that had accounts illegally opened without their knowledge. According to the CFPB: "Spurred by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers' authorized accounts without their knowledge or consent, often racking up fees or other charges. According to the bank's own analysis, employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers. Wells Fargo will pay full restitution to all victims and a $100 million fine to the CFPB's Civil Penalty Fund. The bank will also pay an additional $35 million penalty to the Office of the Comptroller of the Currency, and another $50 million to the City and County of Los Angeles." Read more here.
Wells is widely known for its cross-selling culture, with its products per customer among the highest in the industry. Wells Fargo issued a statement saying: "Our entire culture is centered on doing what is right for our customers. However, at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action. Today's agreements are consistent with these beliefs." Wells Fargo told CNN that it had fired 5,300 employees connected to the misselling. Although Wells claimed that its culture is about "doing what is right for its customers", it appears highly unlikely that the thousands of employees acted independently contrary to the bank's culture.
Chickens are coming home to roost for multinational corporations. Apple's new iPhone 7 was greeted with shrugs, and the company faces paying $13 billion in back taxes to Ireland — while VW was dragged kicking and screaming into an Irish courtroom to face a potential class action lawsuit over its emissions trickery in Europe. But it's Mastercard that now faces the biggest fine in UK history, following yesterday's announcement of a lawsuit alleging Mastercard overcharged consumers in the UK — over a period between 1992 and 2008. Mastercard said it "firmly disagreed" with the claim. "Mastercard charged billion of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers," Walter Merricks, who is bringing the case, said in a statement.
The US Federal Reserve recommended that Congress repeal the 17-year-old law allowing banks to own significant parts of non-financial companies. Former Fed official Dan Landy said that the recommendation effectively means that the "Fed's view of the world" is that "merchant banking is an unsafe and unsound practice."
Barclays and CBA have linked together their mobile payment platforms enabling customers of Pingit (Barclays) to send money by mobile phone to users of CBA's CommBank mobile payments service, according to Finextra. Two markets have emerged for cross-border payments — the remittances markets which tend to go from developed to emerging markets, and transfers between developed markets such as UK and Australia, where peer-to-peer and marketplace transfers have grown popular. (Ireland-based CurrencyFair emerged precisely as an answer to the large fees being charged on UK-Australia transfers, and TransferWise is another business gaining column inches for its intra-developed markets transfer business.)
Chris Skinner takes a look at digital identity around the world, beginning with India's Aadhaar programme. Digital identity is a key link to connect together India's ambitious financial inclusion programme, which will eventually link together government-inspired bank accounts, high-speed mobile connectivity, increased smartphone usage, India's debit card push, and the payments banks — among other things. Read more here.
In related news, India's NPCI denied rumours that RuPay had been hacked, after stories emerged that Chinese hackers had made off with customer data from the payments network. Read more here.
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