Wells Fargo fined for opening 1.5 million fake accounts to bilk customers

[Crazy Lee]

This shit is crazy. I've never seen anything like this before.

http://www.wsj.com/articles/wells-fargo-to-be-subject-of-enforcement-action-over-cross-selling-sales-practices-1473297485

http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html

http://www.nytimes.com/2016/09/09/business/dealbook/wells-fargo-fined-for-years-of-harm-to-customers.html

Quote

Credit cards issued secretly without a customer’s consent. Bank employees creating fake email accounts to sign up customers for online banking services. Customers accumulating late fees on accounts they never even knew they had.

Those illegal banking practices were widespread and pervasive at Wells Fargo, which on Thursday was fined $185 million, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has ever issued.

Federal banking regulators said the practices reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks.

In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by their customers, the regulators said in a news conference.

 

So basically after a lawsuit and investigation, Wells Fargo is being fined $185 million for its employees creating millions of fake bank accounts in customer's names, so they can bilk them for fines. Of course, the Big Bank is blaming 5000 employees and firing them, using them as scapegoats I'm sure. But I can't imagine this happened without much of the bank's management knowing about it.

It seems there was a lot of pressure for bank employees to make certain numbers, like amount of accounts opened per month or something, or get fired. Once again, another company puts such pressure on their employees with unrealistically high expectations just to please stockholders.

Reminds me of the time that blogger tried to quit comcast (or AT&T, maybe) and got pushed around by customer service, and it turns out that places like that hire people who are trained to keep people from dropping their service, and if someone lets too many people cancel their service they get fired.

[Endless/Nameless]

Weird.

I use Wells Fargo and couldn't be happier.
Literally zero complaints.

[Fantasma]

Well that's shit.

 

Yeah there is some pressure for numbers at AT&T but the Customer Retention People I talked with didn't seem terribly unhappy with things.

[DrGravitas]

Effff, I wonder if this will screw with my 401k there -_-;

Edit: Looks like they refunded fees that resulted from the transactions to their customers and my 401K isn't on of their mutual funds so it should be fine.

[#00Buck]

Is your money safe?

Or is it in a bank?

 

[Enigma]

Fuck man. That's scary.

People are poor enough as it is.

[WileyWarWeasel]

Interesting environment:

-Management creates conditions and targets that are near impossible to meet without resorting to illegal activities

-Management blames employees when some inevitably resort to said activities to keep their jobs

@Crazy Lee I agree that while everyone is of course responsible for their own actions this should also extend to management who created the environment in which such illegal actions are carried out in desperation rather than greed/malice.

 

Makes you wonder what other practices have been going on for years that haven't been uncovered yet.

[Fossa]

Wells Fargo is among the most vicious, greedy banks out there; the state of Maryland and the City of Baltimore sued them for predatory lending practices a while back, and they had to pay out something like $175 million, in the city case, and a similar amount in the state one.

I've always used a credit union; I used to have an account at NASA Federal, when I worked there, now I use SECU (State of Maryland Employees). This way, they're owned by the members, and don't have these CEOs raking in millions of dollars, and all these greedy corporate bastards around every corner; fewer fees, better rates.