Bank of Oklahoma and other institutions are under investigation for possibly having created fake accounts and other unauthorized services initiated using customer’s names. There is a twist in these allegations: these fake accounts are not the result of identity theft, but rather, appear to have been opened by  bank employees under pressure to meet sales quotas.

Unfortunately,  this is not the first time something like this has happened, nor is Bank of Oklahoma the only financial institution being investigated.

A Major Scandal is Uncovered

If allegations against Bank of Oklahoma are proven, it would be only the latest in a number of cases in which employees at banking institutions have been allegedly opening unauthorized “fake accounts” in order to generate fees and commissions.

The issue first came to public attention in 2016, when the Consumer Financial Protection Bureau (CFPB) reportedly uncovered evidence that Wells Fargo employees had been creating “dummy accounts” in the names of current customers. Funds would then be transferred to the fake accounts from the customers’ real accounts, causing them to overdraw and incur penalty fees.

Regulators also reportedly discovered that Wells Fargo employees had been filing thousands of fraudulent credit applications, and enrolling customers in various programs, without their knowledge with the use of fictitious email addresses and passwords.

Later, Wells Fargo admitted that bank managers and executives had been aware of such fraudulent activities for several years. Employees who were discovered to have opened fake accounts and other unauthorized services were fired – but Wells Fargo reportedly failed to inform their customers of what had been going on. By the time the CFPB uncovered the scandal, Wells Fargo had fired approximately 5,300 bank employees.

Employees Were Reportedly Pressured

Although the employees who opened the unauthorized accounts were directly responsible, evidence reportedly indicated that they were under extreme pressure by supervisors and managers to generate more fees and sell additional services. Consumer advocates are concerned that his may be the case at Bank of Oklahoma and other banking institutions as well.

Ultimately, Wells Fargo agreed to pay “full restitution to all victims,” in addition to $185 million in fines and penalties to the federal government. However, although the employees who carried out the fraud were terminated from their jobs and CEO John Stumpf publicly apologized for the scandal, no executives were punished, according to reports.

In September 2016, Senator Elizabeth Warren of Massachusetts called on Stumpf to resign. During a hearing of the Senate Banking Committee, Warren said, “You should give back the money you made while this scam was going on, and you should be criminally investigated by the Department of Justice and the Securities and Exchange Commission.”

Stumpf finally stepped down in October 2016. This past February, he reportedly received a strong written reprimand from Michael Gibson, Director of the Federal Reserve’s Division of Supervision and Regulation. In the letter, Stumpf was criticized for his failure to oversee bank employees and investigate their activities.

Bank of Oklahoma and Others

In June 2018, American Banker reported the findings of an extensive OCC investigation of over 40 banking institutions across the country. The investigation found five major issues that banks had not been addressing, as well as over 250 specific matters that needed to be corrected. These included evidence of fake accounts and the opening of unauthorized credit lines in customers’ names.

Bank of Oklahoma, as well as Bank of America, Citibank, JP Morgan-Chase, U.S. Bank PNC, Capital One and other institutions, are currently under the jurisdiction of the OCC. This past year, Wells Fargo reportedly settled two class action lawsuits filed by investors and customers for $480 million $142 million respectively.