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."

Comments

Typical

[Anonymous Coward]

That's what they get for putting unrealistic quotas on the employees.

Re:Typical

[ourlovecanlastforeve]

I am certain that none of those people fired were the managers who established the unrealistic quotas and instructed their staff to create the phoney accounts.

Hiring managers is expensive. Hiring tellers is as easy as calling up Express Personnel and ordering another six-pack of desperate unemployed middle class peons.

Re:Typical

[Anonymous Coward]

Agreed OP. We actually had the same thing happen to us WAY back in the day when I was going to school and working for Gamestop part time.

Story time kids:

They would force employees to push gaming mag subscriptions onto customers and the quota was 7 per week. Now nobody wanted this crap. Customers wanted to come in to buy some games, and maybe talk shop. Subscribe to something that requires a credit card tho? OH HELL NO. Also, half of them weren't even old enough to have a card in the first place, but our DM would literally threaten the manager to fire him, who would threaten his employees to fire us if we didn't produce at least 1 subscription per day per week. So... in desperate times we as a collective of employees (who were actually much closer among retail stores than you'd think) all got together with a fiendish plan to game the system. We took pre-paid visa cards and threw 10 bucks on them and spent most of it on our lunch break. With the few pennies left on the card we'd then subscribe customers for them, giving them a subscription they couldn't be billed for and blowing our quotas out of the water. At first corporate was elated so many stores were suddenly producing a BOOM of subscriptions but like all good things it didn't last. Eventually the magazine publishers caught on, and everything started rolling downhill until literally 5 stores worth of employees and management were all fired and replaced within a month. I just barely escaped the shit-storm by hearing about the crack-down rumors and quitting ahead of time.

Ah greed and corporate fuckwittery. Good times... sad times.

Re:Typical

[lgw]

America doesn't have a "lower class". We have a "middle class" and a "working class". There's a lot of overlap in the pay, the distinction is mostly social, not economic. Banking teller is a middle-class job.

This class distinction is why so few people are willing to enter the skilled trades, despite a lot of advantages to that in our increasingly-outsourced world.

Re:Typical

[Anonymous Coward]

I once bought something at Best Buy and they asked me which of their magazines I wanted, a sports one or and entertainment one. I said neither, and then was told they were free and he stuck an entertainment one in my bag. Best Buy then gave my credit card number to the magazine company which charged me $40 and began sending me the magazine to my house.

I had to call the magazine and explain it was credit card fraud (cardholder not present for transaction is the correct wording to use there) and they could either refund the money or I would press charges. I guess I wasn't the only one that called and they refunded me immediately. Best Buy wasn't doing that next time I went in, but it took about 5 years before I would set foot in their stores after that.

Re:Typical

[Anonymous Coward]

"I once bought something at Best Buy and they asked me which of their magazines I wanted, a sports one or and entertainment one. I said neither, and then was told they were free and he stuck an entertainment one in my bag."

(OP posting) That's exactly what we did with customers at gamestop.

Told them they could have a "free" subscription then signed them up using our visa pre-paid cards with nothing on them so the magazine publishers and Gamestop corporate would get screwed for placing the burden of such stupid quotas on us. No regrets, and regulars got free mags for a while.

Re:Typical

[starblazer]

which will then immediately sell it off to the same company WF did.

Just like police

[Anonymous Coward]

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.

rotten at the top

[supernova87a]

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.

Re:rotten at the top

[Kjella]

So... if I have a business unit that's losing money and I tell it to either turn a profit or they'll be laid off, am I responsible when the employees cheat and break the law to save their jobs because there's no other way? If you hand in your resignation, can I make you a counteroffer or is "ok" the only acceptable response? A lot of this pressure is natural, everybody's looking for ways to increase volume and price, cut costs and reduce losses. And then somebody takes it too far, but how far is too far? Who started it, who's doing it, who's in on it might not be so crystal clear.

I mean it's a little easy to just blame it on your manager who'll blame it on their manager and so on all the way to the top until only Hitler is guilty and the rest were just following orders and trying to fulfill impossible goals. Sorry to Godwin the thread but this is a criminal conspiracy and while there's certainly leaders who should be doing hard time it should be pretty obvious to everyone that when you're faking customer accounts you're doing something blatantly illegal. I say aggressively prosecute everyone you can prove was in on it, top to bottom.

Re:rotten at the top

[supernova87a]

Well, when you're the VP or head of the company and you're told by employees that there's no way to make these targets unless you do unethical or illegal things, then if you incentivize your employees to do those things, you won't have a strong defense that you didn't know or just turned a blind eye and told them to do whatever was necessary to get the company profitable, and they were acting on their own.

Re:rotten at the top

[Razed By TV]

So... if I have a business unit that's losing money and I tell it to either turn a profit or they'll be laid off, am I responsible when the employees cheat and break the law to save their jobs because there's no other way?

If you give the employees an unreasonble goal with insufficient tools to reach it, and tell them that they will be fired if they cannot reach it - I think that makes you responsible for their actions. In fact, that sounds like the definition of coercion.

Now lets say your business isn't losing money, and the stock price has increased steadily since the fourth quarter of 2011 (like, say, Wells Fargo.) In this case, you have misrepresented the health of your company for the purpose of eliciting bad behavior. You don't have much of a defense in claiming ignorance because you have needlessly and intently set up the environment for this to happen. I would say that is absolutely criminal.

Re:rotten at the top

[sjames]

I don't think anyone here believes the employees are to be excused here, just that the managers share in the responsibility and shouldn't be excused either.

Stop linking to CNNMoney.

[Rockoon]

This story is from the same CNNMoney that declared that Math is Racist

Re:Stop linking to CNNMoney.

[amicusNYCL]

That's not even the worst of it!

Employees went so far as to create phony PIN numbers

The PIN numbers weren't even real! It's amazing this fraud was detected at all, they looked just like actual PIN numbers!

Re:Stop linking to CNNMoney.

[eth1]

That's not even the worst of it!

Employees went so far as to create phony PIN numbers

The PIN numbers weren't even real! It's amazing this fraud was detected at all, they looked just like actual PIN numbers!

My PIN isn't real, either. It's 342i

"The CFPB declined...

[gatfirls]

.... 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.

Re:"The CFPB declined...

[Nethead]

"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.."

That has always been my question. About 6 months ago I noticed that my local community bank had opened a branch next to the grocery store/pharm that I stop at at least 4 times a week. I went in an opened an account and could not be happier. I hardly ever have to show ID, they know me by name. I'm support local a local business and the local businesses that use the bank (most of their customers are commercial.) I recognize most of the board as local civic leaders and business-people. It's a small bank with a dozen locations, serving just my county. My checking account number is under 1500 and my savings account number is under 500. The provide good e-services with 2FA. Their ATM is an off brand model that I've never seen so the chances of someone making a skimmer for it is slim. The checking account is free as long as I keep $300 in savings, not an issue. I've never been asked to upgrade or add accounts. They mail me a one page statement each month that is thoughtfully 3 holed punched for storage in a binder. Financial reviews on the web give it an A rating or 4 stars. The health of assets is considered excellent.

Why, in the tangle of FSM's noodles do people go with these huge national banks? Good local banks and S&Ls are all over the place!

If one employee had done this

[wickerprints]

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."

Re:If one employee had done this

[amiga3D]

They committed the sin of getting caught. Therefore they have to pay. Nobody sees the inside of a jail though, that's for the little people not bankers.

Re:If one employee had done this

[wickerprints]

Corporate personhood absolutely lies at the heart of the problem, because it is this legal doctrine that grants corporations those rights, privileges, and protections normally granted to actual persons; and in turn, corporations are, as a single legal "person," able to wield their disproportionate economic power to influence policies, and more importantly the enforcement thereof, in their favor, regardless of politics. This is the very definition of plutocracy, and it is why, while partisans on both sides of the political spectrum bicker ceaselessly about who is to blame for systemic corruption, nothing has been fixed: because corporations have bought the favor of everyone in government whose favor can be bought, which of course is the overwhelming majority.

The real struggle in the United States is not about Democrat versus Republican. That ideological division is perpetuated by those who are in real power--the corporate plutocrats and the companies they control, from Silicon Valley to the mainstream media to traditional manufacturing and energy production. It is in their interests to continue to pit the voting public against each other in an ultimately futile battle, because it hides who really calls the shots.

Was this possible because of SSNs?

[jader3rd]

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.

Obligatory

[Dracos]

In capitalist America, stagecoach robs you!

Re:Fine seems Tiny

[Lead Butthead]

My generation used to burn B of A branches every weekend for weenie roasts. It does not seem to have changed the bank's behavior.

Your generation obviously done a piss poor job of burning BoA branches; they're still in business.

unpunished

[Lead Butthead]

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.

This explains...

[ScentCone]

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.

No jail?

[AndyKron]

Why aren't these people going to jail?

Re:Hoping for a refund

[Anonymous Coward]

If you're paying somebody to hold onto your money for you, you're doing something wrong.

Did you RTFA?

[rsilvergun]

"...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.

Make the bank really pay

[Maclir]

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.