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5K Wells Fargo employees fired over fraud/theft of customer's funds (1 Viewer)

Meh, Costanza pulled this scam 20 years ago.

"Hello Mr vandelay, would you like to buy a computer? Oh really? 2 dozen!"

 
I know someone who used to work at a local, small Wells Fargo branch. Even there, the pressure she would get from her higher-ups to open new accounts and close sales was crazy.  It caused her to eventually take early retirement and leave.  I'm not at all excusing these employees, however.  This is ridiculous.  

 
Ned said:
5,300 employees doing this is just mind blowing stuff.
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Yea. I read about this last night and can't really wrap my head around how this was so widespread. There's no way 5300 people individually across the country sat down and thought to themselves that it would be a good idea to commit identity theft to bump their commission payouts. How in the world did this even happen? 

 
FatUncleJerryBuss said:
Ned said:
5,300 employees doing this is just mind blowing stuff.
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What is mind blowing is that you know they all didn't come up with it independently and it took an outside review to catch them.   
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There's just so much - I just can't process it all.

Some big wigs had to know this was going on.  There's no way 5,300 people acted on it alone (like you said).

How did customers not know they were getting pounded with overdraft fees?  Don't they have to notify you of the charge?

What did they do with the CC accounts after opening them?  You'd think 565K CC's sitting with a 0 balance would raise a red flag?

Really curious how this affects the bank going forward.  How could you trust them to keep your accounts after this?

The stock is down...... 

-$0.21

:lol:  


 
CFPB remains the best thing to come out of Dodd-Frank.  I wonder if this is just the beginning (other banks doing the same)?

 
Shaft41 said:
I know someone who used to work at a local, small Wells Fargo branch. Even there, the pressure she would get from her higher-ups to open new accounts and close sales was crazy.  It caused her to eventually take early retirement and leave.  I'm not at all excusing these employees, however.  This is ridiculous.  
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They didn't hatch this plan on their own...someone very high up the corp ladder wanted to ensure they didn't go down with the ship and took preemptive action. My guess is WF will be sued by their customers and someone on that board or CEO is going to have to walk the plank. 

-Also would like to add that typically in banking NO ONE goes to jail, nobody burned at the cross for any of the mortgage shenanigans HOWEVER...

-When there is a little flub with anything SEC related or Wallstreet sotck/bonds, those people go to jail for a pretty good stint. It pays to be a criminal in banks.

 
The settlements include an additional $5m in customer remediation. They have already refunded quite a bit of that. So at least people seem to be getting their money back.

 
Ned said:
There's just so much - I just can't process it all.

Some big wigs had to know this was going on.  There's no way 5,300 people acted on it alone (like you said).

How did customers not know they were getting pounded with overdraft fees?  Don't they have to notify you of the charge?

What did they do with the CC accounts after opening them?  You'd think 565K CC's sitting with a 0 balance would raise a red flag?

Really curious how this affects the bank going forward.  How could you trust them to keep your accounts after this?

The stock is down...... 

-$0.21

:lol:  
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I handle the financial end of a business.   We banked with Wachovia.   When we were officially brought in with Wells Fargo we had 4 additional accounts (checking and savings).   I noticed and question them and they deactivated the accounts.   But I think a ton of this had to be done during bank mergers.  

 
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Also you can bet that not all 5300 will have direct responsibility, a lot of these people probably had no idea whatever was happening and I would venture to guess some of them will sue over wrongful termination. This is going to cost WF a little chunk of change to settle all this stuff...of course they'll just pick up the phone and call their buddies at AIG to help limit the damage. 

 
This is no surprise to me.  My wife used to be a branch manager and the pressure from corporate to get higher and higher sales numbers was insane.  It was a horrible company to work for and my wife is so much better and healthier after having quit.  

 
Oh no question about it that it was coordinated at a pretty high level. Lots of wrongful termination suits coming. 

 
How does creating dummy accounts get them money?  Where do the funds come from?  Or were they just creating empty accounts to get bonuses for signing up people for accounts?

 
Shaft41 said:
I know someone who used to work at a local, small Wells Fargo branch. Even there, the pressure she would get from her higher-ups to open new accounts and close sales was crazy.  It caused her to eventually take early retirement and leave.  I'm not at all excusing these employees, however.  This is ridiculous.  
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Scoresman said:
This is no surprise to me.  My wife used to be a branch manager and the pressure from corporate to get higher and higher sales numbers was insane.  It was a horrible company to work for and my wife is so much better and healthier after having quit.  
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Father was a branch manager/VP for Suntrust for years and he was harassed a lot to bring in business. Women branch managers had it even tougher from what I heard. 

 
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So... how difficult is it to transfer a savings account, a checking account, a CC and a student loan from one bank to another? 

 
NutterButter said:
Had to be coordinated.  Probably why they paid such a heavy fine.  
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It's not coordinated, it was just horrible management by corporate.  Every night, my wife would have to get on a phone call with all the other area branch managers and tell the district manager their "numbers" for the day.  If it didn't meet some impossible quota they would get verbally berated over the call.  It got to the point where every manager would ask their families if they could open a new account for them just for the sales numbers.  To this day I think we still have empty accounts for stupid reasons ie: a furniture account, a vacation account, etc. etc.  

It's the reason why everytime you'd go into a branch to deposit a check or something mundane they'd try to sell you a thousand different account upgrades or programs.  Just a horrible culture to work in.  

 
culdeus said:
How does creating dummy accounts get them money?  Where do the funds come from?  Or were they just creating empty accounts to get bonuses for signing up people for accounts?
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Definitely was some money collected b/c they refunded a few mill back to customers.

 
They covertly opened the accounts and funded them by transferring money from customers' authorized accounts without permission.

 
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Not buying that 5300 low level employees just decided to commit fraud because of some job pressure. 

 
Andy Dufresne said:
They covertly opened the accounts and funded them by transferring money from customers' authorized accounts without permission.
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Did they somehow bypass the transfer notification? I know its an obvious question/answer, but how would you know as WF account holder that you've been swindled? Serious question. 

 
Slapdash said:
It doesn't have to be coordinated.  People respond to incentives.
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Indeed, the larger issue would have been creating glengarry/glenross type sales culture that tied retail bank employees compensation to either unreasonably or too aggressively high sales goals. Was "Mgmt" involved, almost certainly, but not the "Mgmt" people think of in terms of the big scary banks. You can't move money around other peoples accounts on your own as an employee in most financial institutions, so likely some low level branch mangers or sales managers were involved in order to hit their numbers and make their sales bonuses as demanded by their regional sales managers.

As for prosecuting some of the employees, it likely depends on how egregious their violation was. The narrative that people don't go to jail for this type of stuff is malarkey though. The details in the press release are too sparse, no doubt some upper level corporate executives were fired/reprimanded or something for letting this practice go on or for failing to recognize their sales incentive programs encouraged this behavior. No doubt there will be public pressure to disclose more information, although they may not be able to due to government restrictions, especially if some of these former employees are going to be charged as well.

 
Andy Dufresne said:
The settlements include an additional $5m in customer remediation. They have already refunded quite a bit of that. So at least people seem to be getting their money back.
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I hope they get more than what they were wrongly charged for. I know if it were me and I was having to pay overdraft fees repeatedly because somebody screwed over, there would be a fair amount of anguish involved.

 
Dondante said:
Did they somehow bypass the transfer notification? I know its an obvious question/answer, but how would you know as WF account holder that you've been swindled? Serious question. 
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If you have a bank account anywhere you can be certain you are being swindled in some way

 
honky kong said:
I hope they get more than what they were wrongly charged for. I know if it were me and I was having to pay overdraft fees repeatedly because somebody screwed over, there would be a fair amount of anguish involved.
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Agreed. 

"Here's the money we took. Just keeeding!"

Mega companies are awful.

 
Slapdash said:
CFPB remains the best thing to come out of Dodd-Frank.  I wonder if this is just the beginning (other banks doing the same)?
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It's all over the place.  I first learned of this in any meaningful practice about 2006ish when I switched jobs to a security team within Wachoiva.  I'm surprised more organizations haven't been exposed honestly.  This isn't unique to Wells Fargo.

 
Dondante said:
Did they somehow bypass the transfer notification? I know its an obvious question/answer, but how would you know as WF account holder that you've been swindled? Serious question. 
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Those notifications come from the applications the customers use.  Think about it....if you go into a branch, you only get the notification electronically if you ask for it to be electronic.  Otherwise it's a piece of paper.  You know you've been swindled when your account has $500 one day and $10 the next and you haven't spent $490 in that 24 hours.

 
The Commish said:
Those notifications come from the applications the customers use.  Think about it....if you go into a branch, you only get the notification electronically if you ask for it to be electronic.  Otherwise it's a piece of paper.  You know you've been swindled when your account has $500 one day and $10 the next and you haven't spent $490 in that 24 hours.
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But that doesn't explain it. Why didn't people spot this?

 
These people get bonused on customers opening extra accounts (like a savings). Maybe they opened the other account, transfered money into the customers saving, then transferred it back out. Customer would never know (unless they get hit with fees on a minimal balance), and boom employee meets its quota, gets bonus.

 
culdeus said:
But that doesn't explain it. Why didn't people spot this?
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Read somewhere that people were charged on average $25.  They probably identified the most complacent account holders and charged them small enough amounts where they didn't even notice.   

 
The Commish said:
It's all over the place.  I first learned of this in any meaningful practice about 2006ish when I switched jobs to a security team within Wachoiva.  I'm surprised more organizations haven't been exposed honestly.  This isn't unique to Wells Fargo.
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 yeah.  Should have read as other banks being caught doing the same thing.  Still, forging customer approval on stuff like this is a big line to cross.

 
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