The 12/21/13 LA Times expose`on Wells Fargo details exactly the same screen play that C-Span viewers witnessed this past Tuesday (9/20/16) when the Wells Fargo CEO, John Stumpf testified before the U.S. Senate Banking Committee Hearing regarding the scandal of his bank agents having opened over 2 million accounts without their customers prior knowledge and approval. The Senators from both sides of the aisle grilled him about the company’s well known practice of imposing on his front line employees, the cross selling unrealistic sales goals (the standard is 2 to 3 accounts) of 6 to 8 accounts per client, to where the agents felt forced to dummy up accounts to keep their jobs. Of course Mr. Stumpf claimed that he was taking full responsibility; that measures were underway to correct customer accounts and to prevent similar future incidents; and that he had fired over 5,300 offending employees.
As per a 9/23/16 Bloomberg article, “Wells Fargo Sued Over Firings for Missed Account Quotas,”published on 9/23/16, by Kartikay Mehrota:
“The bankers (former employees) who sued, Alexander Polonsky and Brian Zaghi, are seeking class-action status on behalf of other Wells employees in California who were fired or demoted during the past 10 years and are asking for at least $2.6 billion in damages. The suit includes claims of wrongful termination, retaliation, unlawful business practices and failure to pay wages. Delshad said his clients are no longer Wells Fargo employees and that one is now a real estate agent. The case is Polonsky v. Wells Fargo Bank & Co., BC634475, California Superior Court, Los Angeles County (Los Angeles).”
See the following excerpts to determine if there are any deviations in Mr. Stumpf’s story line as depicted in the 2013 LA Times article by Scott Reckard, from his 2016 performance:
“Meeting account quotas falls mainly to branch (and call center) employees.
“Bank manager Murillo, 41, now employed by another bank, said she resigned from her Wells Fargo branch in the Fort Myers, Fla., area in 2010, even though she had no other job lined up and her husband wasn’t working full time. The couple ended up losing their home.”
“It all seemed worth the chance and the risk, rather than to deal with the mental abuse,” Murillo said. “Just thinking about it gives me palpitations and a stomachache.”
“In February, Becky Grimes, 57, quit Wells Fargo after 14 years as a branch manager in Victoria, Texas. She said she retired early because employees were expected to force “unneeded and unwanted” products on customers to satisfy sales targets.”
“I could no longer do these unethical practices nor coach my team to do them either,” Grimes said.”
“The bank expects staffers to sell at least four financial products to 80% of their customers, employees said. But top Wells Fargo executives exhort employees to shoot for the “Great 8” — an average of eight financial products per household.
“The tracking starts each morning. Managers are asked not only to meet but to exceed daily quotas passed down by regional bosses. Branch managers are expected to commit to 120% of the daily quotas, according to the former Pacific Northwest branch manager, who said results were reviewed at day’s end on a conference call with managers from across the region.”
“If you do not make your goal, you are severely chastised and embarrassed in front of 60-plus managers in your area by the community banking president,” the former branch manager said.”
“Internal documents obtained by The Times show how carefully Wells Fargo tracks account openings and lucrative add-ons.”
“The documents, dated from 2011 through October, include a 10-page report tracking sales of overdraft protection at more than 300 Southland branches from Ventura to Victorville; a spreadsheet of daily performance by personal bankers in 21 sales categories; and widely distributed emails urging laggard branches to boost sales and require employees to stay after hours for telemarketing sessions.”
“An email from a Southern California district manager in 2011 criticized a dozen branches for signing up only 5% to 38% of new checking accounts for overdraft protection — an opt-in service that charges customers $35 for each overdraft the bank covers.”
“A report this spring from a district in the Southwest provided a count of direct-deposit accounts opened by each of 11 branches during a 15-day period, also with the percentage of customers who signed up for overdraft protection.”
“Tarzana retiree Bette Hirsh Levy closed her Wells Fargo checking account last year after discovering that a branch employee had approved her for an $8,200 line of credit without her permission. “I have had a six-figure line of credit with Wells for several years,” Levy said. “There was no reason for me to open another.”
“David Douglas made similar accusations against Wells Fargo in a lawsuit filed Sept. 11 in Los Angeles County Superior Court. He alleges that three Wells Fargo employees in Century City and Beverly Hills used his birth date and Social Security number to open accounts in his name and those of fictitious businesses.”
“They put their own addresses on the accounts so he wouldn’t know about it,” Kade said. “It showed up on his credit report — that’s how he found out.”
“A lawsuit filed Oct. 3 by former bank employee Jahedeh Zarandian in San Mateo County Superior Court alleges that she was wrongfully fired after following her manager’s directions to open accounts in the names of family members. Zarandian’s lawyer, N. William Metke of San Francisco, declined to make his client available for comment. Wells Fargo filed a written response in court denying Zarandian’s claims.”
“A Nevada lawsuit filed in 2009 by Amber Salazar, on behalf of Wells Fargo business bankers in the state, won certification as a class action. The suit claimed that Wells misclassified the bankers as managers, failed to pay overtime and required them to work unpaid “call nights” to solicit business.”
“Wells Fargo settled for $100,000 and did not admit wrongdoing.”
“Prior to his October firing, Wells Fargo business specialist Estrada worked at the Canoga Park branch. He said the manager would greet the staff each morning with a daily quota for products such as credit cards or direct-deposit accounts. To fail meant staying after hours, begging friends and family to sign up for services. He said branch and district managers told him to falsify the phone numbers of angry customers so they couldn’t be reached for the bank’s satisfaction surveys.”
“Estrada said employees would open premium checking accounts for Latino immigrants, enabling them to send money across the border at no charge. Those accounts could be opened with just $50, but customers were supposed to have at least $25,000 on deposit at Wells Fargo within three months or pay a $30 monthly charge.”
“To get around those requirements — and keep earning credit toward their quotas — Estrada said employees would downgrade the original accounts and open new premium ones for the customers before the fees kicked in.”
If there was ever a time for the DOJ and the SEC to flex their muscles to hold individual top executives criminally accountable for overseeing widespread fraudulent activities within their shady enterprise, this is it. Wells Fargo executives have been acting like white collar Mafia Dons for years. This financial institution takes in revenues to the tune of billions of dollars to where the government fines and law suit settlements, are simply considered the cost of doing business.
Related Articles: (Read the following law suits notes to gain a better understanding as to how Wells Fargo conducts its business)
Wells Fargo News – ConsumerAffairs.com https://www.consumeraffairs.com/wells–fargo-news… including information on class action lawsuits, …
Lawsuits Against Wells Fargo Bank – Vaughn’s Summaries http://www.vaughns-1-pagers.com/wells–fargo–lawsuit-summary.htm/ Here is 109 lawsuits filed against Wells Fargo (WFC).
U.S. Sues Wells Fargo: Yet Another Bailed-Out Bank Accused of Fraud …http://www.rollingstone.com/…/u-s-sues-wells–fargo-yet-another-bailed-out-bank…Oct 10, 2012 – Wells Fargo not only got $25 billion in TARP funds just before it bought Wachovia, it got a tax break from then-Treasury Secretary Hank Paulson, worth as much as $25 billion…
Reblogged this on The Militant Negro™.
Dear Jueseppi, The arrogance of these executives is off the charts. Grazie Mille!!! Thanks a million times over for all your support and for this reblog, Ciao Bello, Gronda
Gronda, it should be noted that in addition to Well Fargo, the bank they purchased in Wachovia (which was the old First Union), had numerous fines as well from the CFPB. It should also be noted that Bank of America received the largest fine by the CFPB of $787 million, six times the one received by Wells. They were accused of selling products to customers they did not ask for. Bankers used to be a very trusted profession and leaders likes this have given the hard working bankers a bad name. Keith
Dear Keith, Thanks for the information on Bank of America. What the likes of Wells Fargo and Bank of America have done is guarantee that bank regulations like the Frank-Dodd bill will no longer be challenged in the near future. Yes, these two institutions have helped to discredit the banking industry and Wells Fargo should have been charged more fines.
As per a 10/10/12 Rolling Stone article, “Wells Fargo got as much as $36 billion in federal aid after the crash and got a massive push from the government to help it buy up the dying crash-era megabank Wachovia for $12.7 billion, a shotgun wedding that created the second-biggest bank in America. Wells Fargo not only got $25 billion in TARP funds just before it bought Wachovia, it got a special tax break from then-Treasury Secretary Hank Paulson, which some reports say was worth as much as $25 billion to WF at that time.”
Shortly after receiving all these monies, as per 10/9/12 LA times, “Wells Fargo was sued by the State for vast fraud in the mortgage markets. The U.S. Attorney in the Southern District of New York, Preet Bharara, yesterday brought a case against WF seeking “hundreds of millions of dollars” in damages for what it says is a decade of fraudulent behavior, in which WF wrongfully certified more than 100,000 mortgages as being eligible for federal mortgage insurance. Basically, Wells Fargo screwed the FHA and HUD by mass-approving loans without regard for whether they were defective or not. When Wells Fargo discovered problems with the loans, it failed to notify HUD, which administers the FHA program, as required, the suit said. The action alleges more than 10 years of misconduct.”
“The extremely poor quality of Wells Fargo’s loans was a function of management’s nearly singular focus on increasing the volume of FHA originations – and the bank’s profits – rather than on the quality of the loans being originated,” Bharara’s office said in a statement.”
In short, Wells Fargo has been involved in shady dealings for years, way before WF purchased Wachovia and before the 2008 financial crisis.
I wasn’t being facetious when I said that their executives are ethically challenged. Ciao, Gronda
When will these folks recognize the value of the brand name and how it can become tarnished.
Dear Keith, There is an axiom I like to use, “Looking good is not the same as being good.” Yes, Wells Fargo of the 4 biggest banks, Bank of America, JP Morgan Chase and Citigroup looked the best until recently. There are good banks out there like the one I use, USAA banking (but you have to be military, ex military with honorable discharge or child of USAA member to be able to access the bank). There are others. Forbes has not listed these 4 in the top 50 for years. Yes, Bank of America is the worst.
Wells Fargo has lost this brand of being the best of the super large banks. I hope this is a wake up call for the other three. How is Wells Fargo going to maintain its positive earnings record without having their agents continue their cross selling tactics? There is such a thing as unfair competition. Reputable banks who follow the rules end up being penalized.
Let’s see how good a manager, John Stumpf really is? Ciao, Gronda
P.S. I wonder how Mr. Buffett and (just suck it up) Mr. Munger are thinking about their investments into Wells Fargo? So far, Mr. Buffett is refusing to comment.
Gronda, USAA is a good bank and prides itself on customer service. A friend paid off a car loan with them and got a nice note of congratulations and please think of us for any future needs. Keith
Dear Keith, It is almost unbelievable about how good the USAA bank is. I can transfer funds to different bank accounts from USAA and vice versa in seconds without ever paying a fee; there are no fees for checks; if I use an ATM and am charged, I can count on a refund; it literally takes a few minutes on line to get an auto loan…USAA is the bank that patented the ability to deposit a check by phone and members were able to use this service way in advance of the other banks, etc. etc. etc. It is the absolute opposite of Bank of America.
This is why I become upset with the likes of the big 4 banks. I know with absolute certainty that there is a better way. Ciao, Gronda
I stopped banking with Wachovia before it became Wells Fargo. I see nothing has changed. Wachovia had terrible banking practices and was constantly being hit with fees. I’ve never had those problems with any of my current banks.
Dear the Warner, I also left Wells Fargo a long time ago. I only have an annuity left with them now. The executives have forgotten that the customer s need for great service should not be short changed. Wells Fargo’s actions do not align with one of their stated priorities:
“We put our customers at the center of everything we do and give them such outstanding service and guidance that they’ll give us more of their business, honor us with repeat purchases, and rave about us to their family, friends, and business associates. We want to be the first provider our customers think of when they need their next financial product.”
Talk about empty words, Gronda
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Well said, Gronda. That Wells Fargo statement is a complete lie. Great article.
Very informative! Thank you, Gronda!
Dear Jill, Thanks for stopping by and for your kind feedback. Hugs, Gronda
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