Who is Wells Fargo?
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Founded in 1852 by Henry Wells and
William Fargo in San Francisco, California
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Offered banking where consumers could
buy and sell gold and paper bank drafts.
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In the 1860’s, they opened offices in other
cities of the West and “earned a reputation
of trust by dealing rapidly and responsibly
with people’s money.”
Their Crime
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Since 2011, Wells Fargo employees have created fake
checking accounts and credit card accounts for existing
customers without their consent.
•
Using forged signatures, phony PIN’s and fake e-mail
addresses, the company was able to accomplish this.
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The bank also charged customers at least $1.5 million in
over-draft and maintenance fees for these fraudulent
accounts.
How Did They Do It?
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This was done due to the unrealistic “cross-selling”
expectations led by senior executives of the company.
•
The average number of bank accounts a person needs is
2-3 accounts, where Wells Fargo was setting that number
between 6-8. This put a huge burden on employees to
make sure they meet the sales quota.
•
Executives throwing in incentives such as compensation,
this makes for an even more pressured workload.
Driven by Greed and Corruption
•
Corruption within the supervisory and executive level employees and the
fine print rules Wells Fargo trapped their customers into.
•
The executives and supervisors saw this fraud occurring but disregarded it
due to million-dollar bonuses and the rise of investment in false-advertised
Wells Fargo stock.
•
In order to make the most capital, they risked their customer’s money and
credit scores, as well as the jobs of lower-level employees.
•
Wells Fargo had written in fine print on every contract that their customers
signed that they were forbidden from partnering with others to file a lawsuit
against the bank, they were only allowed a private arbitration.
It Could Have Been Prevented
•
The problem started with this absurd proposal from top
level executives.
•
Greedy, manipulative executives need to stop setting the
bar so high for their company’s cross-selling numbers
when it isn’t going to ever be a reality.
•
There is no way the average American needs 8 bank
accounts and there is no way for lower-level employees to
sell that many products to them.
Their Victims
•
Investors/shareholders, the consumers and 5,300 lowlevel employees of Wells Fargo were fired.
•
Wells Fargo paid $185 million to the Consumer Financial
Protection Bureau, its shareholders will ultimately have
to swallow the cost of that settlement.
New Legislations
• Members
of Congress are working on laws that
will make it harder for Wall Street businesses
and banks to commit crimes such as these.
• Unfortunately,
no one from Wells Fargo
executive administration has been incarcerated
or fired from their position.