WASHINGTON (Reuters) - Wells Fargo has long been the envy of the banking industry for its ability to sell multiple products to the same customer, but regulators on Thursday said those practices went too far in some instances.

The largest U.S. bank by market capitalization will pay $185 million in penalties and $5 million to customers that regulators say were pushed into fee-generating accounts they never requested.

“We regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said of a settlement reached Thursday with California prosecutors and federal regulators.

The Consumer Financial Protection Bureau will receive $100 million of the total penalties - the largest fine ever levied by the federal agency.

“Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences,” said CFPB Director Richard Cordray.

Los Angeles officials and the Office of the Comptroller of the Currency were also party to the settlement.

In a complaint filed in May 2015, California prosecutors alleged that Wells Fargo pushed customers into costly financial products that they did not need or even request.

Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint.

The bank opened more than 2 million deposit and credit card accounts that may not have been authorized, the CFPB said Thursday.

Wells Fargo spokeswoman Mary Eshet said the bank fired 5,300 employees over “inappropriate sales conduct.” The firings took place over a five-year period, Eshet said, adding that the bank has 100,000 employees in its branches.

Wells Fargo regularly releases numbers about how many products it sells to customers, a practice it calls “cross-sell.” Its wealth and investment management unit, for example, sold 10.55 products per retail banking household in November 2015, up from 10.49 a year earlier, according to the bank’s annual 10-K financial filing.

A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, February 10, 2015. REUTERS/Jim Young

In the second quarter, however, the bank changed how it tallies up some of those numbers and said it was considering more changes.

Piper Jaffray analyst Kevin Barker said he does not think the crackdown on Wells Fargo will have much of an impact on others in the industry.

“I think this is unique to Wells Fargo and their particular situation and how hard they push on cross-sell,” he said.</s>(Reuters) - Wells Fargo will pay $185 million in penalties and $5 million to customers that regulators say were pushed into fee-generating accounts that they never requested, officials said on Thursday.

"Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us," the bank said of its settlement with California prosecutors and federal regulators.

"We regret and take responsibility for any instances where customers may have received a product that they did not request," it added.

The Consumer Financial Protection Bureau will receive $100 million of the total penalties - the largest fine ever levied by the agency, which was conceived after the 2008 financial crisis.

"Today's action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences," said CFPB Director Richard Cordray.

Los Angeles officials and the Office of the Comptroller of the Currency were also party to the settlement.

In a complaint filed in May 2015, California prosecutors alleged that Wells Fargo pushed customers into costly financial products that they did not need or even request.

According to that complaint, Wells Fargo employees pushed checking account customers into savings, credit and online accounts that could generate fees.

Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint.

The bank opened more than 2 million deposit and credit card accounts that may not have been authorized, according to the CFPB.

The bank said that the deal this week settles the "allegations that some of its retail customers received products and services that they did not request."

In recent financial filings, Wells Fargo has changed how it describes and calculates "cross-sell" - a term for bundling multiple products to retail, wealth management and corporate customers.

The bank added new language to its last annual report, stating that its "approach to cross-sell is needs-based as some customers will benefit from more products, and some may need fewer."</s>NEW YORK (AP) — Regulators are fining Wells Fargo $185 million for illegally opening millions of unauthorized accounts for their customers in order to meet aggressive sales goals.

The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.

The CFPB says Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers.

In a statement, Wells Fargo said: "We regret and take responsibility for any instances where customers may have received a product that they did not request."</s>Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for.

That's exactly what happened to Wells Fargo customers nationwide.

On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011.

The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

Related: Who owns Wells Fargo? You, me and Warren Buffett

The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up over 1.5 million deposit accounts that may not have been authorized, according to the CFPB.

The way it worked was that employees moved funds from customers' existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as "widespread" and led to customers being charged for insufficient funds or overdraft fees -- because the money was not in their original accounts.

Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.

The CFPB said Wells Fargo will pay "full restitutions to all victims."

Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.

"We regret and take responsibility for any instances where customers may have received a product that they did not request," Wells Fargo said in a statement.

Wells Fargo is the most valuable bank in America, worth just north of $250 billion. Berkshire Hathaway (BRKA), the investment firm run legendary investor Warren Buffett, is the company's biggest shareholder.

The $100 million fine will go toward the CFPB's Civil Penalty Fund, a $35 million penalty will go to the Office of the Comptroller of the Currency, and another $50 million will be paid to the City and County of Los Angeles.

"One wonders whether (the CFPB) penalty of $100 million is enough," said David Vladeck, a Georgetown University law professor and former director of the Federal Trade Commission's Bureau of Consumer Protection. "It sounds like a big number, but for a bank the size of Wells Fargo, it isn't really."

Wells Fargo confirmed to CNNMoney that the 5,300 firings took place over several years. The bank listed 265,000 employees as of the end of 2015.

Related: Barclays fined $109 million for trying to hide a deal with rich clients

"At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action," the bank said in a memo to employees on Thursday.

The CFPB declined to comment on when the investigation began and what sparked it, citing agency policy. "We don't comment on how we uncover these matters," a spokesman said.

As part of the settlement, Wells Fargo needs to make changes to its sales practices and internal oversight.

"Consumers must be able to trust their banks. They should never be taken advantage of," said Mike Feuer, the Los Angeles City Attorney who joined the settlement.

Feuer's office sued Wells Fargo in May 2015 over allegations of unauthorized accounts. After filing the suit, his office received more than 1,000 calls and emails from customers as well as current and former Wells Fargo employees about the allegations.

Wells Fargo declined to say when it hired a consulting firm to investigate the allegations. However, a person familiar with the matter told CNNMoney the bank launched the review after the L.A. lawsuit was filed.

Even though the Wells Fargo scandal took place nationally, the settlement with L.A. requires the bank to alert all its California customers to review their accounts and shut down ones they don't recognize or want.

"How does a bank that is supposed to have robust internal controls permit the creation of over a half-million dummy accounts?" asked Vladeck. "If I were a Wells Fargo customer, and fortunately I am not, I'd think seriously about finding a new bank."

Brian Kennedy, a Maryland retiree, told CNNMoney he detected that an unauthorized Wells Fargo savings account had been created in his name about a year ago. He asked Wells Fargo about it and the bank closed it, he said.

"I didn't sign up for any bloody checking account," Kennedy, who is 57 years old, told CNNMoney. "They lost me as a banking customer and I have warned family and friends."

--To reach the author of this article email Matt.Egan@cnn.com</s>Retail and commercial banking giant Wells Fargo will pay more than $185 million in fines after US regulators accused the bank of secretly opening accounts without customers' knowledge, officials said Thursday.

The Consumer Financial Protection Bureau said employees at Wells Fargo, the world's largest bank by market value, had illegally boosted sales figures by opening unauthorized deposit and credit accounts and then covertly funding them with customers' money, sometimes creating phony email addresses to enroll them.

This resulted in fees and other charges for customers and improperly helped bank employees meet sales targets and receive bonuses, according to the CFPB.

Wells Fargo will pay $100 million to the CFPB, the largest fine to date imposed by the bureau, which was created in the wake of the 2008 financial crisis.

The San Francisco-based bank will pay $50 million to the City of Los Angeles, which had filed suit last year, accusing the bank of pressuring employees into fraudulent behavior, such as opening fictitious accounts.

The bank will also pay a $35 million fine to banking regulators at the Treasury Department in addition to fully compensating all customers concerned, the CFPB said in a statement.

“Today's action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences," CFPB Director Richard Cordray said in a statement.</s>Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for.

That's exactly what happened to Wells Fargo customers nationwide.

On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011.

The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

Related: ATM and overdraft fees top $6 billion at the big 3 banks

The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened up over 1.5 million deposit accounts that may not have been authorized, according to the CFPB.

The way it worked was that employees moved funds from customers' existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as "widespread" and led to customers being charged for insufficient funds or overdraft fees -- because the money was not in their original accounts.

Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.

The CFPB said Wells Fargo will pay "full restitutions to all victims."

Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.

"We regret and take responsibility for any instances where customers may have received a product that they did not request," Wells Fargo said in a statement.

Wells Fargo is the most valuable bank in America, worth just north of $250 billion. Berkshire Hathaway (BRKA), the investment firm run legendary investor Warren Buffett, is the company's biggest shareholder.

"One wonders whether a penalty of $100 million is enough," said David Vladeck, a Georgetown University law professor and former director of the Federal Trade Commission's Bureau of Consumer Protection. "It sounds like a big number, but for a bank the size of Wells Fargo, it isn't really."

The CFPB declined to explain how it came up with the $100 million penalty figure.

Wells Fargo confirmed to CNNMoney that the 5,300 firings took place over several years. The bank listed 265,000 employees as of the end of 2015.

"At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action," the bank said in a memo to employees on Thursday.

It's not clear when Wells Fargo hired a consulting firm to investigate the allegations, nor what triggered the response. Wells Fargo did not respond to a request for comment on this.

The CFPB declined to comment on when the investigation began and what sparked it, citing agency policy. "We don't comment on how we uncover these matters," a spokesman said.

As part of the settlement, Wells Fargo needs to make changes to its sales practices and internal oversight.

"Consumers must be able to trust their banks. They should never be taken advantage of," said Mike Feuer, the Los Angeles City Attorney who joined the settlement.

Feuer's office sued Wells Fargo in May 2015 over allegations of unauthorized accounts. After filing the suit, his office received more than 1,000 calls and emails from customers as well as current and former Wells Fargo employees about the allegations.

Even though the Wells Fargo scandal took place nationally, the settlement with L.A. requires the bank to alert all its California customers to review their accounts and shut down ones they don't recognize or want.

"How does a bank that is supposed to have robust internal controls permit the creation of over a half-million dummy accounts?" asked Vladeck. "If I were a Wells Fargo customer, and fortunately I am not, I'd think seriously about finding a new bank."

--To reach the author of this article email Matt.Egan@cnn.com</s>NEW YORK (AP) — California and federal regulators fined Wells Fargo a combined $185 million on Thursday, alleging the bank’s employees illegally opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals.

The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.

It is the largest fine the CFPB has levied against a financial institution and the largest fine in the history of the Los Angeles City Attorney’s office.

The CFPB said Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers. Money in customers’ accounts were transferred to these new accounts without authorization. Debit cards were issued and activated, as well as PINs created, without telling customers.

In some cases, Wells Fargo employees even created fake email addresses to sign up customers for online banking services.

“Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully,” said CFPB Director Richard Cordray.

The behavior was widespread, the CFPB and other regulators said, involving thousands of Wells Fargo employees.

“Consumers must be able to trust their banks,” Feuer said.

Wells Fargo’s aggressive sales tactics were first disclosed by The Los Angeles Times in an investigation in 2013 . The story series prompted the Los Angeles City Attorney office to sue Wells Fargo over its tactics.

Roughly 5,300 employees at Wells Fargo were fired in connection with this behavior, according to Los Angeles City Attorney’s office.

In a statement, Wells Fargo said: “We regret and take responsibility for any instances where customers may have received a product that they did not request.” Wells Fargo said they’ve refunded $2.6 million in fees associated with any product that was opened without authorization.

Despite the LA Times investigation, Wells Fargo is still known for having aggressive sales goals for its employees. Wells Fargo’s executives highlight every quarter the bank’s so-called “cross sale ratio,” which is the number of products the bank sales to each of their individual customers. The ratio hovers around six, which means every customer of Wells Fargo has on average six different types of products with the bank.

Ken Sweet covers banking and consumer financial issues for The Associated Press. Follow him on Twitter at @kensweet.</s>Wells Fargo & Co. will pay $185 million to resolve claims that bank employees opened deposit and credit-card accounts without customers’ approval to satisfy sales goals and earn financial rewards, U.S. regulators said.

The lender opened more than 2 million accounts that consumers may not have known about, the Consumer Financial Protection Bureau said in a statement Thursday. Wells Fargo, which fired 5,300 employees over the improper sales practices, agreed to pay a record $100 million fine to the CFPB, $35 million to the Office of the Comptroller of the Currency and $50 million to the Los Angeles city attorney to settle the matter. The San Francisco-based bank also will compensate customers who incurred fees or charges, the agencies said.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” CFPB Director Richard Cordray said in his agency’s statement. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed.”

The bank agreed to resolve the allegations without admitting or denying the agencies’ accusations, and said in a statement that it had set aside $5 million for customer remediation.

“We regret and take responsibility for any instances where customers may have received a product that they did not request,” Wells Fargo said in its statement.

The thousands of employees terminated by Wells Fargo included managers and were dismissed over five years, said Mary Eshet, a bank spokeswoman.

“On an annual basis, more than 100,000 team members worked in our stores,” she said. “While we regret every interaction that was not handled properly, the number of instances and team members involved represent a very small portion of our business.”

“Each quarter we consider all available relevant and appropriate facts and circumstances in determining whether a litigation matter is material and disclosed in our public filings,” Eshet said. “Based upon that review, we determined that the matter was not material.”

Thousands of employees at Wells Fargo were involved in opening accounts and moving funds that resulted in customers getting charged fees for services they didn’t seek, according to the regulators. Los Angeles City Attorney Mike Feuer sued Wells Fargo last year and accused the bank of high-pressure quotas for workers that encouraged them to skirt the rules.

“When I worked at Wells Fargo, I faced the threat of being fired if I didn’t meet their unreasonable sales quotes every day, and it’s high time that Wells Fargo pays for preying on consumers’ financial livelihoods,” Khalid Taha, a former employee, said in a statement.

Wells Fargo shares rose 13 cents to $49.90 in New York trading Thursday. The stock has dropped 8.2 percent this year, the third-worst performance in the 24-company KBW Bank Index.</s>More than 5,000 Wells Fargo employees have been fired as a result of a scandal involving phony bank accounts. But do the CEO or other senior executives need to be let go too?

Wells Fargo is paying $185 million in fines after the Los Angeles City Attorney and Consumer Financial Protection Bureau found that Wells Fargo employees had secretly set up new fake bank and credit card accounts in order to meet sales targets.

In some cases, Wells Fargo customers were hit with overdraft fees and other charges because their money had been unknowingly moved from their regular account to a fake one.

The CFPB said Thursday that the practice was "widespread." But how "widespread" remains to be seen. During the past decade, only a few top executives at many U.S. and European banks have lost their jobs due to numerous scandals going back to the financial crisis.

Several big banks inflated the value of mortgage-backed securities on their books. And some major banks coordinated to manipulate the Libor lending rate and foreign exchange rates, for example.

But the Wells Fargo (WFC) scandal impacts thousands of average people a lot more directly than these instances of fraud. Imagine having to pay a fee because someone took your money and moved it somewhere else! The outrage is justifiable.

So it's fair to wonder why some of Wells Fargo's highest-paid employees are not taking more responsibility and why no one is taking the fall.

CEO John Stumpf made $19.3 million in compensation in 2015. That makes him one of the top-paid bankers in the United States as he has been for years, along with these others: JPMorgan Chase (JPM)'s Jamie Dimon, Bank of America (BAC)'s Brian Moynihan and Lloyd Blankfein of Goldman Sachs (GS).

Stumpf, and his predecessor Dick Kovacevich, are well-known in banking circles for leading the bank's efforts to cross-sell, or get customers to sign up for more and more accounts, with Wells Fargo.

Both often won banker of the year awards from various industry organizations because of their cross-selling prowess. The stock has outperformed nearly all of its big bank rivals over the past five and 10 years as well.

Wells Fargo's financial success is a big reason why many investors, including the legendary Warren Buffett, love the bank. His Berkshire Hathaway firm owns nearly 480 million shares of Wells Fargo, a 9.5% stake.

That makes Berkshire Hathaway (BRKB) the largest owner of Wells Fargo. And Wells Fargo is Berkshire Hathaway's second largest holding overall, trailing only Kraft Heinz (KHC).

Berkshire Hathaway and Buffett were not immediately available for comment about the Wells Fargo scandal and whether or not high-level management changes are needed.

Related: Who owns Wells Fargo? You, me and Warren Buffett

But Buffett's right hand man, Berkshire vice chairman Charlie Munger told me in an interview at the company's 2015 annual shareholder meeting, that "Wells Fargo behaves better than the average big bank." He added that "nobody's perfect" though.

Stumpf isn't the only one at Wells Fargo that is making a lot of money though. COO Timothy Sloan took home $11 million in compensation in 2015.

CFO John Shrewsbury received $9.05 million. As did David Carroll, the senior executive vice president in charge of Wealth and Investment Management.

In an SEC filing, Wells Fargo justified Carroll's pay package by saying that under Carroll's leadership, his division "achieved a number of important strategic objectives, including ... growth in loan balances and deposits."

A spokesperson for Wells Fargo said in an e-mailed statement that "both managers and team members were affected by the disciplinary actions and terminations."

Related: Who owns Wells Fargo anyway, You, me, and Warren Buffett

The spokesperson added that the firings took place between January 2011 and March of this year and that it only affected about 1% of its workforce over that timeframe.

"While we regret every interaction that was not handled properly, the number of instances and team members involved represent a very small portion of our business," the spokesperson said.

But a lawsuit filed by the state of California against Wells Fargo in May, 2015 sheds some more light on the bank's cross-selling efforts and alleged misconduct.

According to the suit, Wells Fargo imposes "unrealistic sales quotes on its employees."

The suit claims that employees engaged in "unlawful and fraudulent conduct, including opening customer accounts and issuing credit cards without authorization" and that the bank "has known about and encouraged these practices for years."

"The result is that Wells Fargo has engineered a virtual fee-generating machine, through which its customers are harmed, its employees take the blame, and Wells Fargo reaps the profits," according to the lawsuit.

Wells Fargo boasts that its customers have an average of six financial products or accounts with the bank. It "seeks to increase this to an average of eight" financial products per account holder. It's a company goal "Wells Fargo calls the 'Gr-eight' initiative."

But there's nothing Great about the attention Wells Fargo is now getting though.

--CNNMoney's Matt Egan and Pallavi Gogoi contributed to this report.</s>Wells Fargo, the largest U.S. bank by market cap, will pay $185 million in fines and penalties plus restitution to customers, according to a statement from the Consumer Financial Protection Bureau.

The Office of the Comptroller of the Currency and Los Angeles prosecutor's office were also parties to the settlement.

In a complaint filed in May 2015, California prosecutors alleged that Wells Fargo for years pushed customers into costly financial products that they did not need or even request.

The bank opened more than 2 million deposit and credit card accounts that may not have been authorized, according to the CFPB.
International banking company Wells Fargo agrees to pay $190 million, including $100 million to the U.S. Consumer Financial Protection Bureau (largest ever for the agency), to settle a case involving deceptive sales that pushed customers into fee-generating accounts they never requested. The bank fired 5,300 employees over "inappropriate sales conduct." The firings took place over a five-year period.