• Wells Fargo has agreed to pay a $37.3mn penalty to settle a lawsuit from the US Justice Department (DOJ) accusing the bank of overcharging 771 commercial clients that used its foreign exchange services between 2010 and 2017. 

• Additionally, the bank will directly reimburse the clients with $35.3mn that it admitted to overcharging them.

• The DOJ alleged that Wells Fargo staff cheated the customers by switching digits in the exchange rate to boost the transaction price. For example, let’s say the cost to purchase a pound was $1.357, staff would change it to $1.375 to raise the fees with limited suspicion. 

• If the customer noticed the digit-switching and then made an inquiry, the DOJ alleged Wells Fargo staff simply brushed it off as a mistake and corrected the price. Ultimately, many customers didn’t notice the error and got cheated, it appears.

• It’s also alleged that Wells Fargo currency-exchange staff targeted the digit-switching scheme primarily on customers deemed as less sophisticated and experienced in foreign exchange trading, thereby being less likely to notice it.

• With its settlement, Wells Fargo admitted to the charges brought against it by the DOJ. It speaks to the cutthroat culture that the bank is infamous for, whereby staff are or were encouraged to cut corners and do shoddy things to bolster sales. Though Wells Fargo has tried to distance itself from the culture in recent years, its reputation remains stained.

• The most obvious example of Wells Fargo’s infamous culture was in 2018 when the bank admitted to fraudulently opening millions of accounts for clients without their consent and charging them for services offered on those accounts. The case has spurred roughly $6bn in penalties levied on Wells Fargo and continues to hunt the bank a few years later.

This case against Wells Fargo was kickstarted by a whistleblower who contacted the DOJ. Wells Fargo said it’s taken disciplinary action against more than 20 employees who participated in the scheme.