Wells Fargo fired 5,300 employees for creating over two million bank accounts that customers never asked for in order to carry out corporate sales policy. Wells Fargo is paying a $185-million fine for this strategy to improve stock value.
Not losing his job or his $200 million-plus in stock gains is Wells Fargo CEO John Stumpf… although Senator Elizabeth Warren thinks he should. Here’s what Senator Warren said to Stumpf yesterday before the Senate Committee on Banking, Housing, and Urban Affairs:
Here’s what really gets me about this, Mr. Stumpf. If one of your tellers took a handful of $20 bills out of the crash drawer, they’d probably be looking at criminal charges for theft. They could end up in prison.
But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket.
And when it all blew up, you kept your job, you kept your multi-multimillion-dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich.
This is about accountability. You should resign. You should give back the money that you took while this scam was going on, and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission. This just isn’t right [Senator Elizabeth Warren, in “‘You Should Resign’: Watch Sen. Elizabeth Warren Grill Wells Fargo CEO John Stumpf,” NPR, 2016.09.20].
Marketplace yesterday featured Jim Griebel of Valley Springs, whose daughter was one of the employees Wells Fargo pressured to push unnecessary accounts and who himself got tricked into taking more accounts:
Jim Griebel of Valley Springs, South Dakota said his daughter had an entry-level teller position at Wells Fargo a long time ago, and he remembers there was a lot of pressure, and even shaming, to get employees to cross-sell products and meet quotas.
“One of the biggest problems was angry customers, because they were getting badgered time and time again to sign up for these cards,” he said. His daughter quit after less than a year.
But more recently, Griebel became a Wells Fargo customer himself, with multiple accounts — and then something strange happened.
“About two years ago we got a call from a Wells Fargo employee,” he said. The employee told his wife that they needed to attach a debit card to several deposit accounts; it was presented as a requirement, not a choice. His wife agreed to it, but he didn’t want debit cards, so he called a manager. It was at that point he learned that his wife had been lied to. There was no requirement to get a debit card.
“I don’t know if I would call it illegal, but it was certainly unethical,” he said [Lewis Wallace, “Wells Fargo in the Hot Seat with Senate Banking Committee over False Accounts,” Marketplace, 2016.09.20].
Wells Fargo is temporarily scaling back on cross-selling, but the bank continues to tout cross-selling on its website:
An outcome of offering customers the products and services they need, want, and value is that we earn more opportunities to serve customers, or what we call cross-sell. Cross-sell is the result of serving our customers extraordinarily well, understanding their financial needs and goals over their lifetimes, and ensuring we innovate our products, services, and channels so that we earn more of their business and help them succeed financially. We succeed when our customers succeed [Wells Fargo, “Our Strategy,” downloaded 2016.09.21].
When you walk into Wells Fargo, the tellers will apparently continue to ask intrusive, personal questions, not because they are personally curious, but because they are ordered to “expand the relationship” by finding out details that can hook into selling you more products and boosting CEO Stumpf’s stock value.
I used to go through the Wells Fargo drive through, and got so disgusted with the sales pitches that I called the branch manager and asked them to please note my account so they would stop doing that. It worked for a while.
I have most of my business at a credit union and never have an issue.
Most companies do this. I recently called my wireless provider with some general questions and was subjected to at least 3 sales pitches. It gets annoying,but it must work or corporations wouldn’t do it
They are a terrible fee hungry bank. Over 2 years ago employees were posting how they felt forced to open bank accounts (on a web site called Wellsfargosucks.com), sometimes doing so for homeless people just to try to keep up with the sales goals or they would get fired. Upper management knew what was happening even our local employees would admit how much the bank policies stunk and many of the best long term branch employees left because they hated all the constant cross selling they knew was wrong.
Go to a credit union!
and the beat goes on……
Winner businesses have a lot of good people working who were once Wells Fargo employees and got so fed up with ridiculous quotas and pressures that they quit.
I think employee quotas are absurd for people with no real control of a process. I also think it is a management fad which new executives force on systems in an attempt to justify huge salaries for themselves. The pressure to sell credit cards, etc. just pisses of regular customers who came in to buy a shirt or something similar. My guess is that businesses doing this lose as many customers completely as they gain for some service that is dropped as soon as possible.
Conservatives gripe about government inefficiency, but stupid corporate blunders which ignore local conditions are all over the place.
I imagine that Trump’s folks will soon explain how all this is really Hillary’s fault. You know, just like she started the birther movement and murdered so many people, all while behaving objectively in public in a manner designed to make it look like she is working to help people.
With this being so pervasive and recognized by employees and customers Warren Buffet, a major owner in the company that could have swayed the outcome or divested his interests must have known, he being a major Democratic supporter of Hillary Clinton. There’s a little math for you BCB. When it comes down to it, it’s about money, power, and influence. Warren is quiet as a church mouse right now.
From the web site (and there are many more):
September 25, 2012
I am a former employee and am disgusted with how WF performs it business. They put sales over service and have little to no regard over anything other than seeing how many checking accounts can be opened. They call them “solutions” but its unnecessary sales that often results in fees, too much mail, and irate customers who where talked into something they neither wanted nor needed.
Bankers lose sales credit if an account is closed within 30 days of opening a new account. I have audio recording of my manager advising me to leave accounts open and advise customers that their old accounts will close out after 30 days and to lie to a teen to open a new account. This is not RIGHT!!! They lie to teens and adults advising they cannot convert accounts and must open new ones to get sales credit!
The only way to meet their lofty sales goals is to rely on friends and family and lie/game to existing customers to open additional accounts. This is not right and I am ashamed of my time working for this horrific excuse for a Bank that provides “Outstanding” customer service. ITS A JOKE, CLOSE YOUR ACCOUNTS AND GO ELSEWHERE.
Link for Jerry: http://wellsfargosucks.com/index.php?gbshow=115&page=read
Wow, 2012, thanks for the link happy. Why blame it on anyone other than the boss man who wrote the emails to entice investors. Sounds like the Joop and Rounds EB5 crew. Warren Buffet is related to Jimmy Buffet, why doesn’t he tell Jimmy what songs to write.
The solution is to move your banking away from Wells FARGO. This is demonstrates terrible ethics. When you bank at Wells FARGO you are supporting this type of behavior. Find a new bank if you are a well Fargo customer
The DOJ needs to step in and toss the head bum in the hoosegow http://money.cnn.com/2016/09/21/investing/wells-fargo-fired-workers-retaliation-fake-accounts/index.html
Is that another EB5 GOING ON.
This is not new news http://money.cnn.com/2015/05/05/news/companies/wells-fargo-customer-accounts/
So why has the DOJ sat on their hands while this fraud has been known for well over a year or two and is now just perking up yet again? As I am from South Dakota, corporate fraud as well as fraud committed by elected officials even rival New Jersey, I am still kind of in awe about why this has not gotten any more traction. I wonder if our crack team of EB5 grifters Rounds and Joop, are saying to themselves, “yep, this is how it is done”.
Whops, I just got schooled on why it took so long to go after Wells Fargo. The Huffington Post is all over it, so now I know and so do you. http://www.huffingtonpost.com/entry/cfpb-wells-fargo_us_57e1a76ee4b08d73b82e102e?mwvqrxwanc9xusor
Just imagine a kid in poverty caught lifting a candy bar and carton of milk?
Too bad he didn’t have 20 floors of lawyers and 8 figures of campaign donations. He’d see a little different side of the justice system.
Has anyone seen Kristi, John or Mike expressing their outrage? Have Kristi, John or Mike said how much money (direct and/or indirect) they’ve received from Wells Fargo?
If not, we can assume that Kristi, John and Mike are totally OK with this and just feel bad for WF for getting caught.
Wish there was an enterprising reporter out there that would ask these questions since WF is taking advantage of SD banking laws.
Jana, Mike Rounds is on that committee. Senator Rounds does not appear to have participated in Tuesday’s hearing.
https://www.c-span.org/video/?415547-1/ceo-john-stumpf-testifies-unauthorized-wells-fargo-accounts&live
Rounds’s chief of staff Rob Skjonsberg worked for Wells Fargo:
http://dakotawarcollege.com/senator-elect-mike-rounds-announces-senior-leadership-team/
Open Secrets says Wells Fargo was among Rounds’s top 20 donors in his 2014 Senate campaign:
https://www.opensecrets.org/politicians/contrib.php?cid=N00035187&cycle=2016