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Wells Fargo Fires 5,300 Employees For Creating Millions of Phony Accounts (cnn.com)
An anonymous reader quotes a report from CNNMoney: 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 confirmed to CNNMoney that it had fired 5,300 employees related to the shady behavior over the last few years. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said. 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. 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. The report says that "employees moved funds from customers' existing accounts into newly-created accounts without theier knowledge or consent," which resulted in "customers being charged for insufficient funds or overdraft fees," since their original accounts didn't contain the money. What's more is that "Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent," causing customers who had unauthorized credit cards opened in their names to be "hit by annual fees, interest charges and other fees."
That's what they get for putting unrealistic quotas on the employees.
Wonder how much profit they got?
I can't believe any abuse is this widespread without upper management knowing.
How much you wanna bet most of those people were involved in robo-signing, or some other form of shenanigans OTHER than creating false accounts?
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Bankers are just like police. If you get caught doing something illegal, the worst possible penalty you face is losing your job. And you can just hop to another city and get employed again, it's just a lateral career move, not even really a firing. No criminal consequences, no jail time, nothing.
And people wonder why bankers and police are so hated in America.
Yeah, well, when you see this many people engaging in such widespread consumer fraud and malfeasance, it comes from the top.
It has been documented and interviews with these employees recorded that they were under such pressure from bank managers (and they from VPs, etc) under threat of losing their jobs, that they felt they had to make their numbers in any way they had at their disposal. Including taking people's information that they'd been given for other legitimate purposes, and misusing it to create fake accounts.
1. Volkswagen engineers being pressured to have their vehicles pass emissions
2. Bank employees being pressured to sign up customers regardless of how infeasible
3. Cable/credit card company call center agents being pressured not to let a customer go under any circumstances
4. etc. etc. etc.
The list goes on and on -- these all come from the assholes at the top demanding something that's not possible and effectively incentivizing / requiring front-line employees to lie, cheat and steal from consumers.
Those are the people who should be even more aggressively prosecuted.
I don't suppose that the $16 a month that they charge just for having an account with them is part of the scam?
This story is from the same CNNMoney that declared that Math is Racist
"His name was James Damore."
.... to explain how it came up with the $100 million penalty figure."
Ooh Ooh pick me!
They sat down with Wells Fargo lawyers and accountants and came to an agreed upon amount.
I don't know how people continue to bank with a place that has repeatedly been shown to do everything they can to screw their customers, it wasn't too long ago they were appealing the class action suit because they were stacking debit transactions largest to smallest to maximize overdraft revenue.
If only a single employee had done this, they'd be sent to prison for fraud, right after being fired. But because this behavior was so widespread and apparently came from top levels, what is corporate person that is Wells Fargo to face? A fine that amounts to a slap on the wrist. After all, we can't jail anyone who might be rich and powerful enough to have allowed such fraud to be perpetuated, can we? Too big to fail = too big to jail. And this exposes the blatant hypocrisy inherent to the notion of "corporate personhood."
This sounds like a reason to make it finable for a company to have your SSN, unless they are the Social Security Office, or are your employer and are contributing to social security on your behalf.
Having a unique ID, that's so easily obtainable, is ripe for abuse.
We have such a demand for capital that solutions like Bitcoin will keep popping up to meet the need.
Have you ever used a bank in America? There is no bill sent to a consumer, there is no choice to pay or not, they simply take the money out of the account.
https://youtu.be/GlRG9x0JRMc
There will be criminal charges, right?
In capitalist America, stagecoach robs you!
If a company benefits from fraud, they are guilty of fraud. Why does basic conflict of interest go unpunished today?
... because they have the congress critters in their pocket. Koch brothers concluded many years ago it was better being the script writer behind the scene than being the actors on stage.
ELOI, ELOI, LAMA SABACHTHANI!?
Have you ever used a bank in America? There is no bill sent to a consumer, there is no choice to pay or not, they simply take the money out of the account.
you've just described all the banks and credit unions that I know of.
ELOI, ELOI, LAMA SABACHTHANI!?
There's a telecom that rhymes with "ate tea and pee" that stuffed various services, with related fees, onto our accounts, such as "fraud insurance", without us asking.
When we complained about it being there, they would say, "Oh, we must have misunderstood you; sorry, we'll remove it."
(The "fraud insurance" strangely didn't cover this kind of fraud.)
I'm sure the sales people were pressured with carrots and/or sticks to find excuses to fluff up accounts.
Table-ized A.I.
The bank agreed to pay $185 million in fines, along with $5 million to refund customers.
So they created millions of fake accounts and charged them fees ... and now they're required to only refund $5million to customers? Is each account only going to be refunded $5, or am I missing something here.
If this was an individual and not a bank, he (or she) would be going to jail. This sounds like a collaborative effort. Why isn't a racketeering investigation taking place?
Help! I'm a slashdot refugee.
This was the stuff that made me sick when I worked at Bank of America almost a decade ago. Everyone was so persistent to getting their numbers (especially number of checking accounts they can open) that i'd see people open up checking accounts for a customer when they already had one, or open 2-3 for a new customer, just because. You were expected to open a minimum of 3 checking accounts per day, and my branch was very slow... yeah I rarely ever hit my numbers.
I'm tending to an elderly (creeping Alzheimers-ish) parent with a Wells Fargo checking account. Out of blue she started getting a statement for a completely unused Wells Fargo-branded/partnered AmEx account. She had no recollection of ever setting something like that up, but I assumed that her trashed memory meant she checked some box or inadvertently opted in along the way without realizing it. That's still very possible. But this is even MORE possible. We are not amused.
Don't disappoint your bird dog. Go to the range.
Why aren't these people going to jail?
I wonder if Wells Fargo is still using TekPortal. That thing is such a pile of crap that I would not trust my money with those assholes.
I'm a good cook. I'm a fantastic eater. - Steven Brust
I guess this is what they meant when they said, "Together we'll go far."
As in, "Together, we'll go to jail."
Check out my sci-fi/humor trilogy at PatriotsBooks.
This happens over and over at companies who incentivize their customer service people to push services and accounts. If you ever go to Wells Fargo they always try to shift you into a new kind of account or something. And so I'm sure if not enough people walk in they just resort to making up fake people or changing account signups for people who didn't even show up.
Creating this kind of structure is bad business and leads to dumb things like this.. Companies shouldn't be so stupid as to make this mistake over and over.
http://lkml.org/lkml/2005/8/20/95
Then imagine you try to sue them for it and it's thrown out of court because the cheating agent who signed you up agreed on your behalf to settle any differences in arbitration.
"This isn't rocket science."
No, but it's social science. We've given up raising children with a sense of right and wrong and of shame. You take shame out of the equation and the fear of what "others" might think of you we end up with 5000+ employees who would rather victimize countless strangers so they can keep what they have rather than look for another job.
I don't give a rip if they were threatened with getting fired. They were selfish prats with no sense of ethics. It's this attitude that ALLOWS the powerful to control the "powerless".
"...some states started using recidivism models to guide sentencing. These take into account things like prior convictions, where you live, drug and alcohol use, previous police encounters, and criminal records of friends and family. "
That sounds pretty awful to me. Grow up in a bad neighborhood thanks to 250 years of institutionalized racism (google it if you don't understand the term), Go directly to Jail, do not pass go, do not collect $200.
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by revoking it's banking license. They clearly are not capable of operating with the degree of ethics required, so shut them down. And mark all the executives as ineligible to work in a financial / securities / insurance business for the term of their working life.
shmoes in jail for doing something they were probably ordered to do by the powers that be isn't in the best interests of society? Jeez, what is it with people always wanting to punish the little guy. There are much, much better targets for your outrage than a few dirt poor losers trying to make rent this week.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
It's only okay if executives do it. When they do it, they're finding new revenue sources and increasing stockholder value.
When employees do it, it's fraud and they get fired.
These guys make the VW cheats look like amateurs. Straight keptomania by 1000s of employees. Impressive.
Until now, I didn't know Wells Fargo employees had the same above-the-law protections as police officers. What other occupations allow you to break laws and get away with no legal repercussions?
Thousands or tens of thousands of customers complaining about unexplained fees - that's not going to raise a red flag?
Is there any way to check if you were one of the Wells Fargo customers they screwed over? Also, why did they only pay back $5 million to their compromised customers?
From a technical standpoint, moving money without your consent I can understand, but how the fuck do you not *KNOW* that you are getting charged an NSF fee?
And what kind of moron doesn't at least investigate into what transpired to cause an NSF charge in the first place?
Even if you had so much money that you wouldn't notice if some went missing due to incidental bank fees, if you're getting charged an NSF fee, then that means you DIDN'T have the money... so how the hell can someone not notice this?
File under 'M' for 'Manic ranting'
First, the penalties are missing two zeros. This is about as criminal as it gets.
Not only front line reps but management, compliance, legal are either involved or were deceived, both of which are grounds for mass terminations.
Other damages?
- Those overdrafts probably impacted credit scoring. $$$
- overdrafts often cause other fees, higher costs for good and services, deposits for utility accounts, lots of impacts. $$$$
- The privacy violations alone are worthy of higher penalties.
- This should trigger enhanced oversight and reporting, and that should, by design, cost. $$$$$.
If the company I worked for did this, I would flee. Wow. They got off cheap.
deleting the extra space after periods so i can stay relevant, yeah.
Somehow I feel it ought to be a crime for a company to create an environment in which crime is highly likely to happen; whether it is through lack of leadership or incompetence. Creating false accounts for profit is clearly fraud, in my view, and the scale of the problem indicates that the company leadership have been appallingly incompetent, at the very least, and they should be banned from running a business - I don't know if this is possible in the US, but it certainly is in UK.
Could you say that 5,300 makes it a conspiracy? The numbers are quite staggering and I don't see how it amounts to a mere $5 million in damages to the victims.
To go along with a total absence of healthy foods, non-affluent urban centers aren't going to have 'home-town banks or S&Ls' down the block; they're only going to have payday loan(sharks) and a-hole corporate money vacuums like Wells Fargo, as the market is very much held captive by environment and circumstance. Being poor is very, very expensive.
Cynical?? yep!
Sometimes boldness is in fashion. Sometimes only the brave will be bold.
Shopping for Christmas and they were offering $10 off your purchase if you applied for a card. I asked if I could decline the card if I didn't like the offer and was told yes. The offer was horrible and I said no, two weeks later a card showed up in my mailbox.
Identity theft?
Conspiracy? (5300 people don't commit the same fraud coincidentally)
Speaking of fraud...Fraud?
He will set this straight
Full year 2015:
* Net income of $23.0 billion, consistent with 2014
* Diluted earnings per share (EPS) of $4.15, up 1 percent
* Revenue of $86.1 billion, up 2 percent
* Pre-tax pre-provision profit1 of $36.3 billion, up 3 percent
* Return on assets (ROA) of 1.32 percent and return on equity (ROE) of 12.68 percent
* Returned $12.6 billion to shareholders through dividends and net share repurchases
[source] https://www08.wellsfargomedia....
How can we be sure you are real and not some chatbot?
The difference is that in this case we're talking about fraud on a grand scale. Those employees should not only be fired, but prosecuted too
Yeah, but that doesn't happen to large financial institutions. "Fraud on a grand scale" describes half the housing market from 2000 to 2006. But did anyone go to jail?
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
Sarbanes Oxley (SOX) was supposed to mandate C-level knowledge and responsibility for all actions. Yet here we are with no SOX charges.
WF's C-levels were either aware of the activity or ignorant. If ignorant then this is a SOX violation.
As a bonus, this is Elizabeth Warren's province, and she is exposed for the toothless sellout she really is.
FYI, a much better article on the subject.
This is as systemic, blatant, and direct as Hillary Clinton's e-mail server. Expletives deleted. When do we get to feel like members of society rather than something to be harvested? American exceptionalism, if it actually exists, requires us to be better than most and we are failing.
Oracle had a similar problem in the '90s; offered sales and marketing people huge bonuses for meeting their numbers, so they simple booked orders that customers hadn't actually approved and billed customers for time that wasn't actualy worked. My manager, Ken Ross, at Oracle Marketing pulled down a $40,000 quarterly bonus by billing customers for contractor time that wasn't actually spent working on their projects. Of course, later they had to back out all those fradulent sales and re-release all their earnings reports... not sure on whether everybody got to keep their bonuses or if anyone got fired, I was long gone myself by then.
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Quentin Thomas ("QT") Wiles was brought in to turn around the company, and his high-pressure 'management style' led to disaster for the company.
When hard drive salesmen were rewarded for great performance and punished for less-than-great performance, some managers didn't handle the pressure well.
"the managers rented a second warehouse in Colorado where they personally packed 26,000 bricks into hard drive boxes and shipped them to Singapore in order to shore up the inventory count. After the count was complete, they recalled those serial numbers as defective units, but instead of writing them off, they checked them into inventory, along with other failed drives that had been returned."
Miniscribe on Wikipedia
More on QT Wiles and MiniScribe bankruptcy
You would think that this DASH process by Wiles was abandoned, but I've seen it used today... for IT projects! Although the pressure as far as I can tell has been reasonable.
My beliefs do not require that you agree with them.
Also want to read your cell phone bill every month. More than one company has tried a simple fraud wherein they send you a text message, and if you actually receive the text message, they consider that consent to start billing you $9.99 per month for their "service" of sending you a text message. My wife was on auto-payment and never opened her T-Mobile bills, so it wasn't until I "snooped" on her bills months later and asked her what this extra fee was for that she had any idea she was being scammed. Apparently, her bill going up by $10 per month didn't raise any red flags either, apparently she never looked at her checking account statements either. Why do the cell companies allow _anyone_ who knows your phone number to start billing your account without consent? I don't know... why do banks allow _anyone_ who knows your account number (the one printed on every check you write) to electronically transfer funds out of your account as if you had signed a check? Obviously, they are making a percentage on these transactions, and if somebody commits fraud, it's YOUR job to straighten it out! (By the way, my credit union would only refund the $30 fraudulently transferred out of my account if I permantely closed the account.., which also messes up all the bill auto-paying out of that account.)
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Unfortunately we don't support whistle blowers very well in the country. Often they get charged with crimes for the troubles. So their isn't much incentive to do the right thing either.
We don't need social security. There was a time before the government had its paws in charity. Back then people actually donated money without the threat of violence to charity. They saved up pennies and put them into accounts and investments for retirement. Now we live in a nanny state. We can't afford to send our kids to good schools. We're dependant on government schools to educate our kids and make them dependant on the state too!
No. I want to opt out of this ridicules system altogether. We don't need it. If you think like me and rather take a small insignificant risk or two for the sake of living free come join me in New Hampshire. I moved to New Hampshire because of the Free State Project. Which is a migration movement of people who want to get rid of government and the use of violence against peaceful people. We don't think the government has a right to control. To tell us what to do. We have a right to do as we please so long as it doesn't injure other people. We shouldn't be tagged (social security, licenses plates, etc) or require permission to live (work, drive, etc). We shouldn't be forced to pay taxes under the threat of violence (what they'll do if you don't comply). If you don't agree with the artificial construct called copy"right" they'll lock you up and take away your liberty. Well, that's just plane wrong and undemocratic. The Freenet project says it best: "You cannot guarantee freedom of speech and enforce copyright law" and you need freedom of speech for a true democracy. Freenet also says: "The core problem with copyright is that enforcement of it requires monitoring of communications, and you cannot be guaranteed free speech if someone is monitoring everything you say."
www.freestateproject.org www.freekeene.com www.freetalklive.com
Oh, look, another Libertarian fantasist. You know what happened before Social Security? Many elderly people ended up in abject poverty. Saving for retirement is great, I do it too. But I make a professional salary that puts me in the top 8% of national income. Poor people don't have the extra cash. If people gave to charity in enough volume to address the issue, we wouldn't need Social Security to begin with.
The idea that free people can live and get along without government might work on a commune or some other simple society. But for a complex society like the modern United States it is ridiculously inadequate. You think we can have a space agency, a modern military, and an interstate highway system with everyone just donating what they want to? Do you think you can plan ahead with everyone paying as much or as little tax as they want, or none at all? Do you think the national economy works like a fucking lemonade stand? Fire departments used to be private and paid for by people who wanted fire protection. They don't do that anymore. Maybe you should find out why.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
No, we have Wells Fargo, and turned that shit off. My wife pays the bills online, but manually.
Look back up at my post, now look back down, you're on the Internet. Now look back up. I'm a signature.
Somewhere down the line this had to have been used for some sort of Identity Theft usage as well right? I just can't find the handle. Can anyone find a way to leverage what was just exposed and how it can pertain to identity theft?
RICO Act- The Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act or simply RICO, is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. With all the fines for bad behavior (LIBOR rigging, Gold fix rigging, Subprime Mortgage rigging, ..., need I go on) it is clear the many banks are ongoing criminal organizations and MUST be prosecuted. I'm not holding my breath because the Justice Department is scared $hitle$$ of the banks. The banks played a high stakes game of "chicken" with the government back in 2008 and now they OWN them.