“So the customer essentially handed the banker a blank check,”
October 20, 2016 2:57 PM   Subscribe

Wells Fargo Fined $185 Million for Fraudulently Opening Accounts [The New York Times] “For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees. On Thursday, these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued. Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved. 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 customers, the regulators said in a news conference. The bank has 40 million retail customers.”

Wells Fargo Banking Scandal a Financial Crisis We Can Finally Understand [The Guardian]
“The Wells Fargo mess is the poster child for it all. Last month, the bank – one of the oldest in the country, with a tradition dating back to the Pony Express – disclosed that it would fork over $185m in penalties to regulators after an audit discovered that employees opened as many as 2m deposit and credit accounts in customers’ names but without their consent. Testifying before Congress, John Stumpf, the bank’s CEO and chairman, made much of the breach of trust on the part of more than 5,000 employees who opened the accounts, in an attempt to meeting sales quotas, either earning bonuses or simply holding on to their jobs. While initially he backed away from suggestions that he himself might have been held accountable, last week he discovered he will share some of their pain: independent directors announced they will implement salary and bonus clawbacks, and Stumpf’s own compensation will be on hold while the directors investigate.”
Wells Fargo Executives Forfeit Millions and CEO to Forgo Salary Amid Inquiry [The Guardian]
“Wells Fargo executives will forfeit millions of dollars in the wake of revelations that the bank’s sales quotas led to the creation of more than 2m unauthorized accounts. The bank’s chief executive, John Stumpf, will forgo his salary for the coming months as independent directors launch a new investigation into Wells Fargo’s retail banking and sales practices. Last year, Stumpf made about $19.3m. Stumpf will also forfeit unvested equity awards worth about $41m. Carrie Tolstedt, who oversaw retail banking at Wells Fargo while the unauthorized accounts were opened, was slated to receive as much as $124.6m after retiring this summer, according to Fortune. The bank said on Tuesday that she would not receive an undisclosed severance and would forfeit about $19m in unvested awards.”
‘Lions Hunting Zebras’: Ex-Wells Fargo Bankers Describe Abuses [The New York Times]
“Mexican immigrants who speak little English. Older adults with memory problems. College students opening their first bank accounts. Small-business owners with several lines of credit. These were some of the customers whom bankers at Wells Fargo, trying to meet steep sales goals and avoid being fired, targeted for unauthorized or unnecessary accounts, according to legal filings and statements from former bank employees. “The analogy I use was that it was like lions hunting zebras,” said Kevin Pham, a former Wells Fargo employee in San Jose, Calif., who saw it happening at the branch where he worked. “They would look for the weakest, the ones that would put up the least resistance.””
Voices From Wells Fargo: ‘I Thought I Was Having a Heart Attack’ [The New York Times]
“Several former Wells Fargo employees gave The New York Times firsthand accounts, by email or by phone interview, of how that pressure affected them, and of the ethical shortcuts they say they saw colleagues take. The following are excerpts. Some people asked to be identified only by their first name and last initial, to protect their future employment prospects.
Angie Payden, banker in Hudson, Wis., 2011 to 2014
Actions that I was forced to do as a banker included:
1). Opening travel checking accounts for customers by convincing them that it was unsafe to travel without a separate checking account and debit card;
2). Coercing customers to open credit card accounts to use as overdraft protection for their checking accounts when they were already struggling to keep their checking accounts balanced;
3). Witnessing other bankers and being pressured by management to add credit defense onto new credit applications without the customer’s knowledge, which led to unnecessary monthly fees;
4). Closing and opening new accounts for customers by convincing them that there had been fraud on their existing accounts.”
What Did Wells Fargo's New CEO Know About the Scandal? Senators Push for Answers [Los Angeles Times]
“Two senators are pressing Wells Fargo & Co. about how much new Chief Executive Timothy Sloan knew about the unauthorized-accounts scandal that led to his appointment. Elizabeth Warren (D-Mass.) and Robert Menendez (D-N.J.), outspoken critics of Wells Fargo, also want to know more about how much money former Chief Executive John Stumpf will get after resigning last week in the wake of the controversy. “Given the scope of wrongdoing on his watch, Mr. Stumpf’s resignation is entirely appropriate,” the senators wrote in a letter Thursday to Stephen Sanger, who is the new chairman of Wells Fargo’s board of directors. “But a resignation alone is not enough to assure proper accountability at Wells Fargo,” they said. “Instead, it raises additional questions.””
Letter Warned Wells Fargo of 'Widespread' Fraud in 2007 [CNN Money]
The letter was written by a Wells Fargo (WFC) employee, who had been transferred from the branch after raising sales concerns, and who later won a federal whistleblower retaliation case against the company. Eerily, the letter seemed to predict the scandal Wells Fargo is dealing with today. "Left unchecked, the inevitable outcome shall be one of professional and reputational damage, consumer fraud and shareholder lawsuits, coupled with regulator sanctions," the letter warned. It said the illegal activity in Northern California was "widespread and so highly encouraged that it has become a normal sales practice."
posted by Fizz (81 comments total) 34 users marked this as a favorite
 
fuck the fines, those are just written off as a cost of doing business, it's time to start revoking corporate charters.
posted by any major dude at 3:07 PM on October 20, 2016 [98 favorites]


jail
posted by Artful Codger at 3:10 PM on October 20, 2016 [49 favorites]


What always kills me is that the government would not allow the average joe citizen to get away with these kinds of criminal behaviours and yet if you wear a suit and work in a big enough skyscraper, you somehow get a pass.

Fuck Wallstreet.
posted by Fizz at 3:11 PM on October 20, 2016 [34 favorites]


Fuck Wallstreet

Kill Wallstreet.

The Obama Administration Must Prosecute Wells Fargo
posted by ennui.bz at 3:20 PM on October 20, 2016 [18 favorites]


Senator Warren's grilling of CEO John Stumpf (SLYT) is a thing of beauty.
posted by kyp at 3:21 PM on October 20, 2016 [15 favorites]


Improbably as it always sounds, Cracked actually does decent interviews within their listicle format: I Worked For Wells Fargo: They Made Us Do Some Shady Sh!t
posted by figurant at 3:22 PM on October 20, 2016 [8 favorites]


From the New Republic article that ennui.bv shared:
It’s hard to find a more clear-cut case of securities fraud. Stumpf verbally praised cross-selling metrics to investors when he, by his own admission, knew that those metrics were flawed, underwritten by fake accounts. He never corrected the record, and Wells Fargo to this day has never changed a word of its SEC filings. And fraudulent cross-selling was mostly lucrative to Wells Fargo—the fees on the fake accounts were minimal—insofar as it boosted the stock price.

“You should resign, you should give back the money you took while this was going on, and you should be criminally investigated by both the Department of Justice and the SEC,” Warren said.
!!!
posted by Fizz at 3:22 PM on October 20, 2016 [6 favorites]


I'm sad that this story has not received as much attention as it should. But, it's not surprising to me. This is just another in a long line of financial scandals to hit Wallstreet and as this article states:
Wells Fargo will have a bumpy road, but the rough times probably won't last too long, analyst Chris Kotowski said Thursday. "A year from now I think most people will have forgotten this," he told CNBC's "Power Lunch."
posted by Fizz at 3:25 PM on October 20, 2016 [1 favorite]


I saw a bit of the CEO being grilled by the congressional committee. I just could not decide if he was the most uncaring clueless corporate denizen I'd ever seen or the slimiest bastard. Impeccably dressed, and repeatedly reminded the congressmen that it was quite a small percentage of the customers that were affected.
posted by sammyo at 3:25 PM on October 20, 2016 [1 favorite]


You get the bonus plan! If Wells Fargo fraudulently opened a credit card account in your name, and you now close it, your credit score takes a hit.
posted by sourcequench at 3:28 PM on October 20, 2016 [3 favorites]


I know someone who works in corporate at WF. This is being spun as a positive thing internally. They boosted their value by having such a strong history of cross-selling customers so you'd think this would crush them. BUT WAIT! This will force them to actually legitimately do the thing they claimed they were doing all along and that will make them much stronger than the competition when the dust settles. I don't know where that idea came from or how widespread it is but I kind of doubt it will work out quite as well as he's hoping it will.

This hurt so many people in ways that can't be counted and this fine is nothing for this giant company. It makes me so mad that they knowingly screwed people's credit ratings and banking histories up for so long and they're slapped with a fine.

There are also the many employees who either blew whistles and were retaliated against or went along with their instructions and were thrown under the bus. I can imagine being in either position.

There was recently a story on the local NPR station with interviews with former employees who can't work at any bank now because there is a list of bankers fired with cause that banks share that amounts to a banking-system wide blacklist and many (most or all?) of these employees are on it whether they were whistleblowers or in the group of 5000+ fired when it came to light.
posted by Clinging to the Wreckage at 3:29 PM on October 20, 2016 [13 favorites]


So that's what about $150 per infraction?

For comparison PNC is running a promotion right now where they give you $35 for just talking to them.
posted by srboisvert at 3:33 PM on October 20, 2016 [6 favorites]


Can anyone put into perspective how much $185M is with respect to how much money they actually made off this scam? I could easily imagine 1.5M bank accounts and 0.565M credit cards generated $100 per invalid account, which would mean they basically broke even. Doesn't seem like much a penalty to me. Where's the incentive to not cheat if the worst that happens is you wind up back at zero?
posted by funkiwan at 3:35 PM on October 20, 2016 [5 favorites]


Are the fines going to reimburse the customers who were charged the fraudulent fees? I realize most things in the U.S. are set up as punitive justice rather than restorative justice, but it just seems so elementary to me that the bank be required to pay back the people it essentially stole money from.

If not, is there a possibility for a class-action lawsuit for impacted folks?
posted by overglow at 3:40 PM on October 20, 2016 [6 favorites]




Pitiful. This is no justice. This is a mockery.
posted by Anticipation Of A New Lover's Arrival, The at 3:45 PM on October 20, 2016 [4 favorites]


“The analogy I use was that it was like lions hunting zebras,” said Kevin Pham, a former Wells Fargo employee in San Jose, Calif., who saw it happening at the branch where he worked. “They would look for the weakest, the ones that would put up the least resistance.””

If you think about it, this is essentially the business model your cable company uses*. They're betting that when the two year teaser rate period expires most of us won't hassle with calling them up and asking/demanding that the rate be extended.

Which reminds me. I owe DirecTV a call.

----------------
*And the payday loan people, and the car title loan people , and the secured credit card people.
posted by notyou at 3:47 PM on October 20, 2016 [2 favorites]


"Are the fines going to reimburse the customers who were charged the fraudulent fees?"

In the NYT article at the first link, it says that "...Wells has agreed to refund about $2.6 million in fees that may have been inappropriately charged." So they're paying back the stolen money directly to their costumers on top of the fines paid to the government.

It's a strange scandal. If I understand it right, the amount of money the bank stole was relatively small, and the individual crimes were committed by thousands of employees and managers who were trying to work within an incentive system that encouraged them to make sales at all costs. So the executives created a shark tank, then threw their employees in to see who could survive. Now we're seeing the consequence of what happens after seven years of that kind of evolution, when you're trained to see your costumers as an exploitable resource.
posted by Kevin Street at 3:55 PM on October 20, 2016 [4 favorites]


Ugh.

Guess we're looking for a new bank now.
posted by palmcorder_yajna at 3:57 PM on October 20, 2016 [6 favorites]


Can anyone put into perspective how much $185M is with respect to how much money they actually made off this scam?

They probably made little in direct revenue. But the company's sky-high market cap was, in part, due to having more open accounts than anyone else. Before anyone knew about the scandal, the company was worth over $275 billion; now it's $228 billion. So you could say they made around $50 billion in equity from the bogus accounts. It's mostly gone now -- except for the part that's already been spent in the form of bonuses.
posted by miyabo at 4:05 PM on October 20, 2016 [8 favorites]


More and more, I'm glad I have my accounts in a smallish local bank, one that has been around for over 150 years. They're conservative with investments (very much of the suspicious 'if an investment sounds too good to be true, it is' mindset), and firmly believe they're here to serve their customers, not the other way around. And if I ever hit the lottery you can bet I'll trust them with my mega-millions.
posted by easily confused at 4:18 PM on October 20, 2016 [1 favorite]


The bank gained (and has now lost) tens of billions in equity from the policy of aggressively cross-selling financial products to existing costumers, which was enabled by their internal system of incentives and punishments. So the incentive system helped make Wells Fargo one of the few large American banks that's still consistently profitable, and that led to increased investment.

But that same shark tank system also created the environment which led to their employees committing thousands of small crimes. From Clinging to the Wreckage's comment above, it sounds like they're going to continue with the cross-selling, and try to find a new way to incentivize their employees.
posted by Kevin Street at 4:20 PM on October 20, 2016


I yelled at a friend on facebook when he posted about this with commentary about hoping every employee who did this goes to jail. I'm pretty confident that he still doesn't understand why. Of course he's angry at the CEO and executives! They just didn't seem worth calling out! How can I absolve people of their moral obligation to society when they clearly had the option to just quit or become whistleblowers?!!
posted by the agents of KAOS at 4:20 PM on October 20, 2016


GEORGE BAILEY
No, but you . . . you . . . you're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house . . .(to one of the men). . . right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others. Why, you're lending them the money to build, and then, they're going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?

Now it's skimming mafia dons and quotas disguised as incentives.
posted by lazycomputerkids at 4:21 PM on October 20, 2016 [2 favorites]


Can anyone put into perspective how much $185M is with respect to how much money they actually made off this scam?

My impression from half-assed reading is that Wells Fargo actually lost money behind all this. The story is roughly:

1. The Gods of the Copybook Headings whisper, "You get what you measure, not what you want." They are ignored.

2. Upper management notices that more accounts means more revenue, from fees off checking accounts or interest off credit cards.

3. More accounts is better than fewer accounts! Look, a graph.

4. So get the retail employees on the front line to aggressively upsell customers until they each open up a certain arbitrary number of accounts we just made up.

5. That may be hard to pull off?

6. Who cares, just put them under more and more pressure until they do it.

7. Meanwhile, the world actually does not need that many checking and credit card accounts.

8. Faced with an impossible demand, some employees quit, and some are fired.

9. But some start opening fake accounts.

10. This possibility was not on the graph. In defiance of nature, God, and reason, it happens anyway.

11. Fake accounts, being fake, don't have the same attractive properties as real accounts. People aren't actually using them, so they don't generate interest or fees (or anyway the great majority don't; if you're going to open a fake account in someone's name you're most likely going to make it a free one so they don't notice. The ones that generated fees were a small minority). Plus keeping the account open has some overhead.

12. But most of all, the perpetration of the fraud itself requires tremendous resources in the form of employee time and energy, and customer goodwill.

13. So there are more and more accounts, but the bank is making less and less money per account.

14. The people who are in charge of noticing stuff like that, and the people in charge of making sure retail employees hit their numbers without mouthing off about "reality" or "ethics," are two totally different groups of people. So this just continues until it's exposed.
posted by officer_fred at 4:33 PM on October 20, 2016 [20 favorites]


It's wrong that people in the middle decided to sell out their own customers/clients. But I get the mentality. These bankers in the middle have their mortgages, bank-loans, and their children's college tuition to pay for. It's still wrong on every level, it's criminal, but I understand why people make that selfish choice. Especially because they're doing it with the push of a button and the click of a mouse. It's so faceless, it's easy to betray your own morals and ethics this way. The problem is that the system is built to take advantage of people at the bottom. The shit flows ever downwards.
posted by Fizz at 4:39 PM on October 20, 2016 [4 favorites]


Not strictly WF's fault, but they have screwed me recently. I'm broke through next week with my kids right before Halloween thanks to a trick their collections debt pulled. None of the divisions within WF seem to like or trust each other. It's too big, organizationally, to function properly on top of the corruption.
posted by saulgoodman at 4:41 PM on October 20, 2016


Dont forget the insider trading...
posted by asra at 4:48 PM on October 20, 2016 [2 favorites]


Here's that NPR story Clinging to the Wreckage mentions. It's enlightening and enraging.
posted by minervous at 4:48 PM on October 20, 2016 [6 favorites]


I grew up in Charlotte. A First Union savings account was opened for me at birth, and when I was 16, I opened a First Union student no-fee checking account. When I was in grad school, Winston-Salem based Wachovia merged with First Union. My accounts stayed the same, and honestly very little changed.

Then during the financial mess, Wells Fargo pretty much forceably acquired Wachovia, and they soon sent me a letter saying that they didn't have no-fee checking, and that the checking account that I had had for 20 years would now have a monthly fee unless I kept a preposterous balance (of an amount of money I didn't have) in it at all times.

So I walked down the street and opened up an account at a local credit union. When I went into the local Wachovia transitioning to Wells Fargo branch to close my accounts, they were very nice and apologetic and offered to pull some strings and get me into no-fee checking (which of course they do have). I told them that it was not them, they had always been great, but that I didn't trust their new owners. I had no idea how right I was.

The credit union continues to be awesome. They have never charged me a fee for anything. And once a year I get a small amount back because any money they make gets returned to their members, not paid to shareholders.
posted by hydropsyche at 4:50 PM on October 20, 2016 [33 favorites]


Why doesn't Elizabeth Warren set up a whistle blower 800 hotline that goes straight to her office?
posted by any major dude at 5:05 PM on October 20, 2016 [1 favorite]


People aren't actually using them, so they don't generate interest or fees

But it does hit your credit rating and in that way severely impacted people that went to do something legitimate like buy a car they could afford and should be qualified but were turned down. The banks need to have some kind of penalty that hurts more than a parking ticket.
posted by sammyo at 5:08 PM on October 20, 2016 [3 favorites]


Guess we're looking for a new bank now.

Look for a credit union instead. There should be several in your area you can join, and one thing about credit unions is, many of them are interconnected in ways that banks are not. You can do a lot of your basic business at any credit union location of any flavor as long as they're part of the Shared Branching system. Also, a lot of credit union ATMs are interlinked so if you have fee-free card use at your home credit union ATM you will have fee-free card use at ANY participating credit union ATM.

Ditch the banks, join a credit union. I think you'll be pleased.
posted by hippybear at 5:21 PM on October 20, 2016 [11 favorites]


And the angel said unto them, fear not: for, behold, I bring you good tidings of great joy, which shall be to all people. For unto you is born this day in the city of Cambridge a savior, which is Warren the Senator. And this shall be a sign unto you; ye shall find the Senator in a hearing at the Capitol, tearing some Wall Street asshole a new one. And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, Fuck the one percent, and on earth peace, good will toward the working class.
posted by uosuaq at 5:24 PM on October 20, 2016 [8 favorites]


I really hate this situation because I bank with them, and I want to leave them, but it's such a pain in the ass to switch banks!
posted by oceanjesse at 5:39 PM on October 20, 2016 [1 favorite]


I have the same issue oceanjesse. Just thinking about untangling from auto bill pay and the auto debits from my WF accounts makes my head hurt. No way I pull that off with missing something somewhere and getting hit with a late fee.
posted by COD at 5:42 PM on October 20, 2016


A lot of credit unions that have more open membership have created pre-made "switch kits" which have all the forms you need to fill out and take to your bank to get all this stuff transitioned as easily as possible. Might be worth looking into.
posted by hippybear at 5:45 PM on October 20, 2016 [8 favorites]


Prison, prison, prison.
posted by latkes at 5:51 PM on October 20, 2016 [2 favorites]


I'm curious about the people who have much more sympathy for the WF employees than I do (basically everybody it seems). I honestly want to understand the perspective.

I'm glad if they've been blacklisted, they committed fraud, against customers, while working at a bank. Any bank that would hire any of them ever again would be incredibly irresponsible. They should be all be charged. No one "made them" do this, their jobs were threatened. That's very far away from being "made" to do something.

They have my understanding, that's a difficult situation. When everyone around you has normalized bad behaviour it's extremely difficult to push back, often it's hard to even recognize the behaviour as bad. They stole from innocent people using a fairly indirect method so it's psychologically easier. Many people these days are struggling to pay the bills and support their families, and jobs are hard to come by. Capitalism in general normalizes some pretty terrible behaviour when you look closely. But these people are all still, at the very least, cowards.

Obviously, it goes without saying really, the higher ups have more culpability here.

But is it just me noticing something for the first time or is this a trend: It seems we have started to accept "I'm just doing my job/I had to or I'd lose my job" as an increasingly valid excuse for unethical behaviour. The phrase "Just following orders" is such a cliche that I don't have to finish that point.
posted by Infracanophile at 5:55 PM on October 20, 2016 [6 favorites]


I'm anxious to take corporate personhood to its logical end in the US: capital punishment.
posted by Emperor SnooKloze at 6:00 PM on October 20, 2016 [9 favorites]


I'm glad if they've been blacklisted, they committed fraud, against customers, while working at a bank.

There are a lot of people on the blacklist who were whistleblowers about the fraud. Basically "fired by a bank" means you don't get to work in a bank again, regardless of the reason. But being fired for whistleblowing seems like a good reason for any trustworthy bank to hire such a person. But blacklist. Etc.
posted by hippybear at 6:00 PM on October 20, 2016 [9 favorites]


I'd like to know how bad you have to be to get an F. Or for that matter, why BofA has such a high rating when they have all those complaints and I've heard plenty of crap stories about them.

My mom's bank got taken over by Wells Fargo in the 80's and she got out of there VERY quickly after that. I should ask if she knew of them doing anything skeevy then. But good for her for getting out.

I don't know what to say on the employees. For all I know, maybe they weren't able to get any better jobs or had some other personal situation going on that made breaking the law in a shit job better than being broke/homeless. And apparently whistleblowers just got canned.
posted by jenfullmoon at 6:02 PM on October 20, 2016


fuck the fines, those are just written off as a cost of doing business

Fines aren't. A repayment or customer settlement would be, but a fine is specifically non-deductible.
posted by jpe at 6:14 PM on October 20, 2016


Can anyone put into perspective how much $185M is with respect to how much money they actually made off this scam?

They made about 2 million from them.
posted by jpe at 6:18 PM on October 20, 2016


I just opened a saving account at the credit union associated with my alma mater and set up a transfer of my savings from Wells Fargo to the CU. It's a start. Unwinding checking will be more painful.
posted by COD at 6:18 PM on October 20, 2016 [2 favorites]


a fine is specifically non-deductible

"Written off" doesn't necessarily mean at tax time. Sometimes grocery stores price milk below the price the pay for it ("loss leader") as a way to get people into the store to shop. A store "writes off" the losses as a cost to doing business, which hopefully they make up in other columns.
posted by hippybear at 6:19 PM on October 20, 2016 [4 favorites]


Something worth noting is that both the executive compensation clawbacks and the 185 million dollar fine(and indeed the existence of the Consumer Financial Protection Bureau) were all enabled by the Dodd-Frank financial reform bill, signed into law by Obama only 6 years ago.
posted by rockindata at 6:22 PM on October 20, 2016 [22 favorites]


Th executive clawback provision of Dodd Frank is one of the rules the SEC hasn't finalized yet. The Wells clawback policy goes back to 2008. They were required to have it as part of TARP and they kept it.
posted by jpe at 6:29 PM on October 20, 2016


No executive jail time = no executives deterred from trying again in a few years.

And, though they can't legally write off the fines, I'm sure they'll find a workaround.
posted by ccaajj aka chrispy at 6:36 PM on October 20, 2016 [2 favorites]


"Written off" doesn't necessarily mean at tax time. Sometimes grocery stores price milk below the price the pay for it ("loss leader") as a way to get people into the store to shop.

To protect local dairy producers from being undercut by large out-of-state retailers, it's often illegal to sell milk at a loss, even in aggregate.
posted by RonButNotStupid at 6:41 PM on October 20, 2016 [1 favorite]


So the milk thing was a bad example. The idea of the loss leader in stores is undoubtedly still practiced, regardless of the specific product.
posted by hippybear at 6:53 PM on October 20, 2016


Don't forget that Wells Fargo was the company selling fraudulent subprime mortgages to people just because they were black or brown, aka 'mud people". These customers qualified for prime rate mortgages.

And anybody who wonders if they're clueless or a slimy, take it from me that they are slimy. The one shareholder meeting that I went to (as part of a shareholder action demanding WF to stop illegally selling subprime mortgages to minorities - this was before the ACLU took them to court for it) it was very very clear that they had utter contempt for their shareholders and the whole annual shareholder meeting requirement. I've been to a few shareholder meetings now and they were easily the slimiest group of executives so far though Chevron gives them a run for their money.

If there was ever a company that deserved to have its Charter pulled, Wells Fargo is it.
posted by small_ruminant at 7:36 PM on October 20, 2016 [13 favorites]


Many people these days are struggling to pay the bills and support their families, and jobs are hard to come by. Capitalism in general normalizes some pretty terrible behaviour when you look closely. But these people are all still, at the very least, cowards.

The employees that brought this issue up, while you may think them noble and not cowards, were retaliated against. There was never any option for them that would be a good option.

Do you think that the employees may also be people struggling to pay the bills and support their families? I'm not excusing shitty corporate shenanigans, but if you're being threatened with being fired, which would effectively end your career in banking, and this was all going on during the great recession...

How would you feel every day if you're just trying to do a job and get paid so you can eat and have housing and your boss is threatening your livelihood and future if you don't do his shady things? Being fired from a bank is no joke and compromises someone's entire career and employability. That's just as shitty as the thing they were pushing the employees to do.

I would love to see this case become a referendum on how retail employees in all sectors are treated in general.
posted by asockpuppet at 7:39 PM on October 20, 2016 [11 favorites]


And I have very little sympathy for the employees that did this. Yes, they needed money. Sometimes I also need money - but I don't steal from people to get it.
posted by small_ruminant at 7:39 PM on October 20, 2016 [2 favorites]


How much of this fine was good investigation by public servants, and how much was Wells Fargo not having enough lobbyists compared to their competition?
posted by infinitewindow at 7:56 PM on October 20, 2016 [1 favorite]


I don't care if you have sympathy for the employees or not. Every word spent on "punish the employees!" is a distraction, a choice to continue with the default easy option of picking out low level followers and pretend that punishing them will break systemic patterns of exploitation. This is the argument for jailing everyone caught selling a gram of drugs and hoping that will end the drug trade. How have we not yet figured out how ineffective that is?
posted by the agents of KAOS at 8:04 PM on October 20, 2016 [21 favorites]


I work in a related field. I would not hire someone who I thought was involved in this, no matter how low (high?) on the totem pole they are. Yes, by all means break the execs. But their minions, who are the folks I'm likely to rub elbows with, aren't getting off scott free in my books.
posted by small_ruminant at 8:22 PM on October 20, 2016


Looking forward, we on the left have a mandate to use this Clinton presidency to push like hell for massive reforms to policing, environmental policy, safety net policy, and to the finance industry.

Having a Democrat in office is mostly good for one thing: you have some hope of pushing on them for real change. Real change won't come from inside her administration, but if we push hard we may get some worthwhile change out of the next 4 years. We should use this as an example case and fucking riot in the streets to get these executives sent to jail.
posted by latkes at 8:23 PM on October 20, 2016 [1 favorite]


We should use this as an example case and fucking riot in the streets to get these executives sent to jail.

What?
posted by hippybear at 8:25 PM on October 20, 2016 [1 favorite]


But their minions, who are the folks I'm likely to rub elbows with, aren't getting off scott free in my books.
What about the minions who were fired and put on the blacklist because they attempted to blow the whistle?
posted by une_heure_pleine at 8:44 PM on October 20, 2016 [5 favorites]


High five to the whistle blowers, but they weren't the majority. I'm not sure what your point is?
posted by small_ruminant at 9:16 PM on October 20, 2016


No one "made them" do this, their jobs were threatened. That's very far away from being "made" to do something

CEO Stumpf, is that you?
posted by triggerfinger at 9:27 PM on October 20, 2016 [2 favorites]


Naked capitalism has also been covering this story quite extensively if you want to get some more colour.
posted by dopeypanda at 10:41 PM on October 20, 2016 [1 favorite]


"Do you think that the employees may also be people struggling to pay the bills and support their families? I'm not excusing shitty corporate shenanigans, but if you're being threatened with being fired, which would effectively end your career in banking, and this was all going on during the great recession...

How would you feel every day if you're just trying to do a job and get paid so you can eat and have housing and your boss is threatening your livelihood and future if you don't do his shady things?"

When I referred to people struggling I meant the employees specifically, that's why I said I could understand just going along. Real consequences is what makes it a choice between bravery and cowardice.

And while the circumstances are different, I will never own a house in the city I live in because I have refused to do shady things. It did affect my livelihood, I make half or a third as much as a result, and these were legal and much less shady than what we're discussing.
posted by Infracanophile at 11:38 PM on October 20, 2016 [2 favorites]


"Every word spent on "punish the employees!" is a distraction, a choice to continue with the default easy option of picking out low level followers and pretend that punishing them will break systemic patterns of exploitation."

"CEO Stumpf, is that you?"

Exploitation? This isn't the drug war, these are middle class people with white collar jobs who are committing identity theft at scale. Just because they do it for corporate masters, because they work for people who are far far worse, doesn't mean we abandon the rule of law. The customers in question were mostly much less successful people, with much less power than these bank employees, *they* were being exploited. They targeted the poor and vulnerable to keep their middle class job and get their bonus.

This is what I don't understand, where is your line? I understand mine is in a different place, but where is yours? Identity theft from the poor is acceptable to keep your job to you but not me. Obviously the ridiculous examples like murder we would agree is not acceptable. But it's the middle ground I'm curious about. How bad is the act before the foot soldiers should be punished, regardless of how politically protected their bosses are and what financial pressure was put on them?
posted by Infracanophile at 12:00 AM on October 21, 2016 [5 favorites]


the problem for Wells Fargo isn't only monetary, in fact it's mostly non-monetary, in the sense of "goodwill" and brand value. The bank has been around for a long time and prides itself on maintaining corporate values for almost that whole period. When Sen. Warren pokes around at that (right at the start of her dismantling of Stumpf), she is hitting a very sore point.

We have five primary values that are based on our vision and provide the foundation for everything we do:

People as a competitive advantage
Ethics
What’s right for customers
Diversity and inclusion
Leadership


It's going to take WF a long time to come back from this and Stumpf's exit is only the beginning.
posted by chavenet at 2:39 AM on October 21, 2016 [2 favorites]


> Look for a credit union instead.

Several times now, front line staff at my credit union have tried to upsell me on services in the course of me trying to do otherwise routine things having nothing to do with buying their investments.

It creeped me out, and the only reason I haven't yanked all our accounts, yet, is the huge hassle of doing so noted above, and this:

The pure despair that "everybody sells" has infected this supposed, oft-recommended refuge.

The stink is *everywhere*.
posted by one weird trick at 4:33 AM on October 21, 2016


I'm ok with selling, I'm not ok with fraud. I expect a bank to protect me from fraud, not to incur it.
posted by oceanjesse at 4:49 AM on October 21, 2016 [3 favorites]


It's an epidemic of greed. It's Countrywide.
posted by benzenedream at 7:42 AM on October 21, 2016 [1 favorite]


military or military family? try USAA...above reproach and superb service.
posted by judson at 7:59 AM on October 21, 2016 [4 favorites]


This is what I don't understand, where is your line? I understand mine is in a different place, but where is yours? Identity theft from the poor is acceptable to keep your job to you but not me.

My line is I wouldn't do it. I was one of those bankers in 2011. I was out of work and had been out of work for nine months because I made the ill-advised decision to move home in the middle of a recession and overestimated my chances of finding a job in my field with my good experience and background. After going through all my savings, ending up on food stamps and literally desperate for a job so that I could pay my next month's rent (I couldn't even get a callback from Starbucks when I applied), I finally got offered a job at Wells Fargo as a banker. It paid a $35,000 salary, which isn't nothing but it wasn't exactly making me rich (and was high compared to some who were making as little as $12/hour, as Elizabeth Warren has pointed out, and which is not middle class). However, given the fact that I had been living so close to the edge of poverty, where one little thing going wrong could have spelled disaster, I felt like a king.

It was one of the worst jobs I ever had. The pressure was intense, the scrutiny was humiliating. In our training they had told us that we should not under any circumstances open unauthorized accounts. But I saw pretty quickly how they said one thing and then how the managers just turned the other way and never really questioned anything when people hit their numbers. Some people are acting like these bankers woke up every morning and rubbed their hands together with glee like"WHICH POOR PERSON SHOULD I STEAL MONEY FROM TODAY? HAHAHAHAHA", which is not only so gross a mischaracterization as to be almost comical, but also fails to see how these companies knowingly set up a system that takes advantage of and exploits not only the customer, but the lower-paid employees. And no matter what happens, the guys at the top always win. If anything goes wrong, they can point at the employees and blame them, which is literally what John Stumpf was doing again and again at his congressional testimony and is one of the things Elizabeth Warren absolutely (rightly) zeroed in on.

Were some of the bankers who were fired legit bad people who didn't give a shit what they were doing and more than happy to act unethically? I'm sure some were. But those people are everywhere, in every industry. Grouping together the legit bad guys with the good-people-in-a bad-situation and blacklisting them en masse from an entire industry on the rationale that being fired from Wells Fargo means their character is somehow flawed when the whole job, company and culture was structured to support them doing the wrong thing or risk losing their livelihood is messed up.

I was lucky in that two months into my horrible Wells Fargo job, I was offered another job which was in my actual line of work and which put me back on my career track. I was getting very close, I think, to being fired from Wells Fargo for not meeting my targets, so it was in the nick of time. But I'll tell you, that kind of grinding poverty and that perilous feeling of being so, so close to having your whole house of cards tumble down is absolutely terrifying. And I can't even imagine what it would of felt like had I had kids to support. And that when you're looking into that kind of an abyss, the thought that pops into your head saying "hey, maybe I can hold onto this account application for a few days before I put it through so I can meet my targets and get my manager off my back for another week" is hard to resist. And again, I never did that because I got lucky and found a way out. But I saw lots of situations around me every day where there were little things that could potentially be rationalized away any number of ways by people who were desperate to keep their jobs.

Of course every person should always do the ethical and right thing at all times. But if we've set up a system where doing the wrong thing is so extremely easy and doing the right thing can often take a tremendous amount of will and self-sacrifice, blaming people who were set up to fail for then failing seems exceptionally harsh. Especially, when the people who benefited from the failure knew the system was set up that way and didn't care . The anger at the workers is totally misplaced.
posted by triggerfinger at 8:00 AM on October 21, 2016 [36 favorites]


Don’t judge a man until you have walked a mile in his shoes

- Cherokee proverb

If you've gone through what these mid level workers went through and stayed on the straight and narrow - kudos for you. You're made of tougher stuff than a lot of other people. In my book you have earned the rights to yell and demand their blood.

If you have not - have a little compassion and empathy. You do not know what they went through. Compassion is not lessened when you do more of it - you can have compassion for the fraud victims and the perpetrators at the same time.
posted by 7life at 10:04 AM on October 21, 2016 [4 favorites]


Reading these former WF employees' stories took me right back to the time I worked at a bank, in a job which began as a customer service position that quietly (and inappropriately) morphed into a sales position with quotas. The stress gave me ulcers and there were many, many trips to the restroom to cry. I fled to a different sector before I could be fired for "underperforming." This was back before the tech bust, before the recession; jobs were plentiful and employment options, even for a young person without a lot of work experience, were abundant. To this day I feel I was very lucky to have gotten out when I did, in the way I did.

Fuck sales quotas, and fuck the corporate culture that believes the way to improve metrics is by making it the responsibility of disposable employees instead of actually delivering a useful, valuable product or service.

I have some friends who recently pulled their personal accounts from WF to move to a credit union and WF has done everything possible to make it painful and inconvenient for them. The whole enterprise deserves to be razed to the ground.
posted by trunk muffins at 11:22 AM on October 21, 2016 [3 favorites]


Wells Fargo just lost its BBB accreditation

This is worthless. The BBB is a subscription service, a marketing gimmick, paid for by the business itself. It is in no way affiliated with the government, or any kind of regulation.

How many people do you know who look for a BBB rating anymore?

(All due respect to notyou, I am not criticizing your comment; any talk of the BBB as some sort of credible source has just become a pet peeve of mine since they tried to get me to sign my business up with them.)
posted by vignettist at 11:54 AM on October 21, 2016 [7 favorites]


*And the payday loan people, and the car title loan people , and the secured credit card people.

Let's not forget that Big Banking are the backers of all of these companies.
posted by vignettist at 11:58 AM on October 21, 2016 [2 favorites]


No executive jail time = no executives deterred from trying again in a few years.

Only in a smarter way. "The last time we tried this we got caught because of abc. Now we're going to work around that by doing xyz". Along the lines of the cliché that jail is just grad school for criminals.
posted by vignettist at 12:03 PM on October 21, 2016


Several times now, front line staff at my credit union have tried to upsell me on services

If this is the only thing you don't like about them, please let someone higher up know that they need to stop pressuring the front line employees to do that. As a member, they should take your request seriously and it is probably not those front liners who are deciding to do this. You could tell the front liners you dislike it in person when they do it if you want, but it is probably not up to them.
posted by soelo at 12:36 PM on October 21, 2016 [2 favorites]


Seconding all the suggestions to look at a credit union. When I left HSBC because of the money-laundering fiasco, my credit union prepared all the paperwork to switch over my direct payments. While it meant a bit of signing and mailing from me, we got them all with no late payments or problems.
posted by scruss at 1:11 PM on October 21, 2016




The BBB is a subscription service, a marketing gimmick, paid for by the business itself.

Think of it in your terms, then. As a result of this, WF can't hang on to the gimmick BBB accreditation they paid for.
posted by notyou at 7:02 AM on October 22, 2016


Hi. I was a second-shift Wells Fargo phone banker from late 2009 - early 2010, and I want to talk a little bit about the absolute shitfuckery I witnessed and was subjected to, in my ~6 months there.

I was in one of the last transitional teams during the WF takeover of Wachovia, and as such, we were supposed to start trying to sell former Wachovia customers on new WF "features" without getting access to, y'know, the operating systems that would give us credit for all of those "sales" we were trying to net. So everyone - every single person - in my 40 person team was always woefully under the RIDICULOUS sales percentages WF had set for us.

Each week, I would get a dressing-down from my manager, who'd already gotten a dressing-down from HER manager, about my dismal sales goals, because...I am not a salesperson, by nature, and yall I didn't have it in me to try to push identity protection and superfluous savings accounts to people who were calling in because they'd just gotten overdraft fees. Every Monday when I came into work I knew I'd be hauled into a room by myself and asked just why I thought I was failing and why I couldn't try harder.

In February of 2010, our big promotional push was mortgages. MORTGAGES.

Meanwhile, I was talking with customers who were obviously living paycheck to paycheck, calling in because a $3 bank fee from a savings account with a $0 balance they didn't remember opening had pushed them into the red and WF had frozen their account.

One lady called, in tears, because she'd gotten her disability direct deposit and it was already gone - because WF had a delightful policy wherein daily charges were placed in a hierarchy of 1. Checks 2. Automatic deductions and 3. debit card transactions. She'd forgotten about her power bill, and the night before had gone to a gas station, a grocery store, and McDonalds to get her kids some dinner. WF took all the money out for the power bill, and then slapped her with over $100 in overdrafts for the 3 debit card transactions - which all added up to less than $30.

It was a hellish work environment. All the horrible "improvement plan" bureaucracy of an office job, and the awful performative aspects of customer service. After awhile, I gave up on even trying to meet sales goals and started trying to figure out just what I could get away with - I figured out that the Wachovia computer systems would NEVER let me refund overdraft fees but I could refund the shit out of every single bank fee ever levied against a customer, so that was a good trick I showed to a few coworkers. Some of us banded together as a little No Fucks To Give tribe - we'd chainsmoke and take too long on our breaks (it gave the managers something else to Be Concerned About during the Monday gauntlet) and talk about shit we'd managed to pull in customers' favors, how to get around the system.

At this point I have to stop and say NEVER EVER SIGN UP FOR OVERDRAFT SERVICES. NEVER EVER EVER GODDAMN DO IT. I'M NOT TALKING ABOUT OVERDRAFT PROTECTION - I'M TALKING ABOUT ACTUALLY GIVING PERMISSION TO YOUR BANK TO LET YOU FALL INTO THE RED. DO NOT DO THAT THING EVER.

If I'd been able to do more to help customers, I might have stuck around longer. But it was intensely demoralizing, having to explain to customers day after day exactly what bullshit bank rule had taken their money from them. After two months, I had the CPS numbers for half a dozen states memorized because somebody'd get behind on child support, the bank would get a letter and freeze their account, and the customer would call in and I'd have to tell them "hey, I have a number you need to call". At least every two weeks I'd have to walk a terrified woman through setting up her own bank account without her husband knowing - I'd have to start that conversation with "are you somewhere safe?" Once I had to discuss options with a mom who was sobbing because her son had taken her card and skipped out and she knew he was using again but she was worried that if she cancelled the card, he wouldn't be able to get home if he needed to.

I cried a lot in my car in the parking lot, during breaks.

So...yeah. I was incredibly lucky, in some respects, that I could just let go and let God after only a few months. I didn't have a family or kids relying on me to keep that paycheck coming; when (not if) I got canned, I could find some other stupid job in town pretty easily. I was allowed to choose not to play the game. I had a lot of coworkers who were even more stressed out than I was, because they had houses and children and a spouse out of work - they couldn't afford to give up one of the best entry-level paychecks in town. They were still trying to make it work, still plugging away at mortgages and identity protection and college savings accounts, terrified of being let go. A lot of them eventually were - because of their low sales numbers.

I wound up getting a job offer for a bakery in town while I was on a meal break at the call center - I went back to my desk, got my stuff, emailed my team leader, and split. I had to pull over on the highway because my hands were shaking so bad, I was so happy: I never had to go back.
posted by floweringjudas at 1:21 PM on October 22, 2016 [24 favorites]


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