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Wells Fargo Employee Informed the Bank of Fake Customer Accounts in 2006 (vice.com)

Posted by msmash on from the body-of-lies dept.

Wells Fargo recently paid fines totaling $185 million for the creation of 2 million unauthorized accounts since 2011. But the international banking and financial institution could be committing this fraud since as early as 2005, according to a letter obtained by Vice News. From the report: A Wells Fargo bank manager tried to warn the head of the company's regional banking unit of an improperly created customer account in January 2006, five years earlier than the bank has said its board first learned of abuses at its branches. [...] A letter written in 2005 and obtained by VICE News details unethical practices that occurred at Washington state branches of the bank, suggesting the conduct began years before previously understood. Dennis Hambek, a former branch manager in West Yakima, Washington, sent a certified letter in January 2006 to Carrie Tolstedt, then Wells Fargo's head of regional banking, outlining unethical "gaming" activity at area branches. In 2007, Tolstedt was made the company's head of community banking, the division where many of the unethical practices occurred.

9 of 104 comments (clear)

  1. Well this is exciting by Anonymous Coward · · Score: 5, Insightful

    I'm super stoked to see absolutely nobody see the inside of a prison cell over this, Wells Fargo slapped with a fine a tiny fraction of a percentage of what they took in by this scam, and then go about business as usual.

    1. Re:Well this is exciting by Oswald+McWeany · · Score: 5, Insightful

      It's not like they did something reprehensible, like pee in the woods and get spotted, or smoke MJ recreationally.

      --
      "That's the way to do it" - Punch
    2. Re:Well this is exciting by magarity · · Score: 3, Interesting

      Wells Fargo slapped with a fine a tiny fraction of a percentage of what they took in by this scam

      I don't think the bank itself as a corporate entity made any money. This was employees trying to game the company for personal bonus money and to meet performance targets.

    3. Re:Well this is exciting by PraiseBob · · Score: 3, Informative

      Do you seriously believe that? ...The bank implemented a fairly complex system of both punishments and rewards to motivate employees into taking these actions, which primarily devolved into millions of employees stealing hundreds of millions of dollars from their customers.

      And you think the bank just benevolently passed on ALL of the profits from this scheme to tellers, without any benefit to the corporation? The entire point of paying a sales commission or bonus is to give the employee a small cut of the profit and keep the main profit for the parent entity.

  2. WF is corrupt to the core by The-Ixian · · Score: 3, Interesting

    That bank is, by far, the worst when it comes to ethical treatment of customers.

    Especially those who live on the edge (paycheck to paycheck). They have downright sinister overdraft policies and practices.

    I ditched WF years ago and I am happy to be rid of them.

    --
    My eyes reflect the stars and a smile lights up my face.
    1. Re:WF is corrupt to the core by Moheeheeko · · Score: 5, Interesting

      the best thing you could possibly do is find a local federal credit union. They may not have branches everywhere, but you can access all of your account from almost any credit union. I've been a member of the credit union of my hometown for years and ive never had to switch, despite not living within 100 miles of a branch.

  3. Risk Management: Playing the odds by ADRA · · Score: 4, Insightful

    As anyone who's watched Mr. Robot knows, Just cheating the system doesn't stop a company from doing it, even when they're aware of it happening.

    If the fees minus inflation are less than the profits, why would a profit maximizing company ever decide to do the right thing? Its ludicrous. The company is simply charged a fee. The middle-managers and peons are rarely prosecuted and the executives always feign that they had no idea what was happening. There's no requisite paper trail to audit, so the only thing that could catch them is conspiracy to evade prosecution, but there'd have to be caught with a lot of 'shredding' in order to get that to stick.

    The laws are 100% stacked so that profit maximization is the only goal to achieve. Being a purely law abiding corporate citizen is a losers bet.

    --
    Bye!
  4. Re:broken url to article? by parkinglot777 · · Score: 3, Interesting

    You can look at the article instead. The Vice link doesn't seem to work correctly (or need to register for the feed?).

  5. The most outrageous aspect by MikeRT · · Score: 3, Interesting

    Is that there are at least a few examples of employees reporting to very senior leaders what happened and facing a targeted campaign of reprisal intended to ensure they could not work in that industry again (by revoking certification).

    We need a white collar crime equivalent of Felony Murder while we're at it. If someone suffers financial loss as a consequence (foreseeable or not) of your criminal conduct, you are held liable as though you intended to cause it. Level of intent doesn't matter anymore once you reach legitimate felony intent.