Ouch
Seedy's head explodes.
Quote
5,300 Wells Fargo employees fired over 2 million phony accounts
http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/
I came.
Wrong incentives create wrong behaviour. Film at 11.
Quote from: 11B4V on September 08, 2016, 06:49:40 PM
Ouch
Seedy's head explodes.
Quote
5,300 Wells Fargo employees fired over 2 million phony accounts
http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/
The ones who should be fired are the executives who pressured their employees into making those accounts.
Was it legal to create the accounts?
Quote from: The Brain on September 09, 2016, 01:43:59 AM
Was it legal to create the accounts?
Most likely not. Looks like fraud to me.
Quote from: The Brain on September 09, 2016, 01:43:59 AM
Was it legal to create the accounts?
they moved people's money to the fake accounts too, not just created them.
Quote from: HVC on September 09, 2016, 02:02:14 AM
Quote from: The Brain on September 09, 2016, 01:43:59 AM
Was it legal to create the accounts?
they moved people's money to the fake accounts too, not just created them.
Creating an account for someone who didn't agree and then charging them for it seems like a fraud in my book, even if they were not moving the money.
Quote from: Martinus on September 09, 2016, 02:05:00 AM
Quote from: HVC on September 09, 2016, 02:02:14 AM
Quote from: The Brain on September 09, 2016, 01:43:59 AM
Was it legal to create the accounts?
they moved people's money to the fake accounts too, not just created them.
Creating an account for someone who didn't agree and then charging them for it seems like a fraud in my book, even if they were not moving the money.
true, but the act of moving the money would move it to wire fraud and laundering, wouldn't it?
Yep, always been a pretty shitty company.
I just skimmed the article but it does not seem to me to address in any way the dysfunctional incentive system that leads to such behaviour.
People in banks are really pressured to reach even higher, unrealistic sales targets, with their jobs on the line (I guess it's really hard to call it an "incentive system" any more - it's more "gun-to-the-head" system, because the pay is structured in a way that means you cannot support yourself if you do not meet the targets - provided they don't fire you in the first place). Of course they can always go work elsewhere, but it is not always an option. This is a systemic issue and not just a case of some rogue employees, imo. It is not limited to one bank either.
So what has come of the police investigations? Surely all cases were reported to the police.
Quote from: Martinus on September 09, 2016, 02:46:58 AM
It is not limited to one bank either.
Yes, all banks are evil.
Quote from: garbon on September 09, 2016, 02:17:42 AM
Yep, always been a pretty shitty company.
I would refinance my mortgage with another company, but it would just eventually get bundled and sold back to Wells Fargo anyway. :lol:
I am glad that they fired all those illegal immigrants, though.
Quote from: The Brain on September 09, 2016, 03:43:55 AM
So what has come of the police investigations? Surely all cases were reported to the police.
I would imagine the Obama's attorney general's memo is still in force and no criminal charges are brought against bank employees for fear of disrupting the finance system. :hug:
But they had such a nice song in The Music Man :(
My retirement accounts are with Wells Fargo, my deferred comp is held by them, and my mortgage was just recently sold to them as well.
:hmm:
Quote from: Caliga on September 13, 2016, 09:51:26 AM
My retirement accounts are with Wells Fargo, my deferred comp is held by them, and my mortgage was just recently sold to them as well.
:hmm:
They buy everybody's mortgage.
My last mortgage was held by 5/3 Bank.
Quote from: Caliga on September 13, 2016, 10:02:09 AM
My last mortgage was held by 5/3 Bank.
Ok fine. They buy shitloads of mortgages. Yes you are technically correct there are lots of mortgages they do not, in fact, own.
Relax. :)
Quote from: Valmy on September 13, 2016, 10:04:12 AM
Quote from: Caliga on September 13, 2016, 10:02:09 AM
My last mortgage was held by 5/3 Bank.
Ok fine. They buy shitloads of mortgages. Yes you are technically correct there are lots of mortgages they do not, in fact, own.
I've told you a million times not to exaggerate!
I'd ask how hard this made you Free Marketeers cum, but that's between you and the Lord.
QuoteWells Fargo fired 5,300 workers for improper sales push. The executive in charge is retiring with $125 million.
By Renae Merle September 13 at 8:28 AM
Washington Post
When Wells Fargo was hit last week with $185 million in fines after thousands of its employees were caught setting up fake accounts customers didn't ask for, regulators heralded the settlement as a breakthrough.
The Consumer Financial Protection Bureau noted that the $100 million it will collect as part of the deal was the agency's "largest penalty" ever. The head of Office of the Comptroller of the Currency, a banking regulator, said its $35 million penalty would "demonstrate that such practices will not be tolerated and banks will be held responsible." "This is a major victory for consumers," said Los Angeles City Attorney Mike Feuer, touting the $50 million the city extracted from the bank.
But the fines being levied against Wells Fargo pale in comparison to the bank's yearly profit -- more than $20 billion in 2015.
It is also less than the more than $200 million that the stock in the company held by company's chief executive, John G. Stumpf is worth. The fines also are not that much more than the $125 million one of its top executives, Carrie Tolstedt, will walk away with when she retires this year. An 27-year veteran of the bank, Tolstedt ran the community banking division where regulators said aggressive sales goals fueled illegal behavior by bank employees,
"Tolstedt's team is a leader in building and deepening customer loyalty and team member engagement across the business, which today serves more than 20 million retail checking households and 3 million small business owners, and employs 94,000 team members," the company said in a statement last July announcing her retirement.
As first noted by Fortune Magazine, Tolstedt, 56, retirement package is expected to reach nearly $125 million, including thousands of shares of Wells Fargo stock, options, and restricted shares. Tolstedt's has earned a base salary of $1.7 million for at least the last four years, according to Securities and Exchange Commission filings. That was set to reach $1.75 million this year before Tolstedt announced her retirement. She has typically awarded millions a year in bonuses and Wells Fargo stock.
According to regulators, thousands of Wells Fargo employees were allegedly involved in a widespread scheme to reach aggressive sales goals -- and earn bonuses -- by creating 2 million accounts, including credit cards, customers didn't authorize. The employees created phony email addresses to enroll existing customers in online-banking services, for example, and issued them debit cards they didn't request. Customers were then often hit with assorted fees for accounts they didn't know they had, the regulators charged.
Wells Fargo said it has dismissed 5,300 workers, including some managers, during the past five years for such illegal practices. They all worked in Tolstedt's community banking division, the company said.
The bank is "working to significantly strengthen our training, monitoring, oversight and compensation structure, which led to a reduction in this behavior," Wells Fargo spokeswoman Richele Messick said in an email. "We believe the changes we have made have strengthened Wells Fargo and will help ensure this behavior doesn't happen in the future."
At the center of the bad behavior appears to be an effort by the bank to persuade customers to sign up for multiple products, known as "cross selling." A customer who opened a checking account would be encouraged to consider a debit card or savings account. This strategy is common in banking industry, but Wells Fargo is considered particularly aggressive.
The case has thrust the San Francisco-based bank into a harsh spotlight at a time when big U.S. banks are still attempting to repair their reputations following the 2008 financial crisis. Anti-Wall Street rhetoric has become a common refrain during the presidential campaign and some advocates are hoping to turn that populist anger into an aggressive legislative push to rein in the financial industry next year.
The Wells Fargo case could be used to further galvanize criticism that the Obama administration has not done enough to banking industry executives responsible for bad behavior, consumer advocates say.
"There are two possibilities: Customer abuse was part of business model, in which case lots of high ranking people need to go to prison," said Bart Naylor, a financial policy advocate for Public Citizen. "Or the bank is too big to manage, and folks high up don't even know that laws are being broken a few levels down."
The magnitude of the fraud described by regulators should be thoroughly investigated, five Democratic lawmakers said in a letter to the head of the Senate Banking Committee, Richard Shelby (R-Ala.), asking for a hearing on the case. The lawmakers, including Sen. Robert Menendez of New Jersey, said Wells Fargo's CEO, John G. Stumpf, should be called to testify.
"It is difficult to believe a large-scale, coordinated [scheme] like this took place without knowledge of some higher ups," Menendez said in an interview.
It's that about right. Hopes she chokes on it.
It is amazing even with such low interest rates banks can still collect 20 billion dollars in annual profit. Their investments must be astronomical.
http://money.cnn.com/2016/09/14/investing/wells-fargo-investigation-federal-fake-accounts/index.html
Quote
U.S. opens investigation into Wells Fargo fake accounts scandal
Elizabeth warren for first female president.
https://youtu.be/QEDAW50HMeA (https://youtu.be/QEDAW50HMeA)
Yeah it's TYT, but it has excerpts of her questioning Fargo CEO John Stumpf
Quote from: Valmy on September 14, 2016, 08:19:33 AM
It is amazing even with such low interest rates banks can still collect 20 billion dollars in annual profit. Their investments must be astronomical.
Didn't see this before, but would point out that the story is all about banks making money through fees, because interest income is not enough.
Quote from: Valmy on September 14, 2016, 08:19:33 AM
It is amazing even with such low interest rates banks can still collect 20 billion dollars in annual profit. Their investments must be astronomical.
The absolute number on interest rates is irrelevant. The spread is what matters. If Wells can borrow at 0.25% and earn 3.20% it will make a profit.
Those numbers aren't picked at random BTW. It's their actual interest margin as reported on their 2015 annual report.
The hearings in Congress were entertaining. The Mylan ones even more so.
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
Many great political sound bytes were recorded. That's real progress, man.
Quote from: The Minsky Moment on September 23, 2016, 04:37:53 PM
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
You should ask Mortimer and Randolph the next time you're having cigars and brandy at the Heritage Club.
Quote from: CountDeMoney on September 23, 2016, 05:37:58 PM
Quote from: The Minsky Moment on September 23, 2016, 04:37:53 PM
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
You should ask Mortimer and Randolph the next time you're having cigars and brandy at the Heritage Club.
Now why would I ruin a perfectly good brandy with cigar smoke?
Peasants
Quote from: The Minsky Moment on September 23, 2016, 04:37:53 PM
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
Who had a favorable image of this bank?
Quote from: garbon on September 24, 2016, 11:12:06 AM
Quote from: The Minsky Moment on September 23, 2016, 04:37:53 PM
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
Who had a favorable image of this bank?
19th century stage-coach bandits?
Music Man fans?
Quote from: garbon on September 24, 2016, 11:12:06 AM
Quote from: The Minsky Moment on September 23, 2016, 04:37:53 PM
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
Who had a favorable image of this bank?
Pretty sure general counsel is legally obligated to say that about their clients in public.
Quote from: CountDeMoney on September 25, 2016, 09:00:16 AM
Pretty sure general counsel is legally obligated to say that about their clients in public.
Not required but highly recommended. ;)
FWIW I've been adverse to Wells, never represented them.
Wells always had that reputation as the best bank. That's like the whore with the fewest sores, but still.
For the record, I've had an account there for 25 years. In the first ten years, not a peep from them. If I'd wanted a loan, there would have been radio silence. I did a couple of jobs for WFHM when I was consulting. They liked to say they took only the safest deals and whatever. The market crashed, bla bla. Suddenly, one day, I started getting calls from them along the lines of "you do a good job with your money! How else can we help you?" I said give me interest on my savings. :P
No.
But I will say is that ever since I've not been broke, Wells has been trying to sell me stuff. It's what they've been selling to Wall Street for a long time too.
Quote
A J.C. Penney Co. store in Plano, Texas, Feb. 23, 2014.
The surprising group of shoppers boosting sales at JC Penney
More than half of shoppers start search at Amazon, not Google
A shareholder class action lawsuit was filed against Wells Fargo & Co on Monday that alleged the firm misled investors about its financial performance and the success of its sales practices.
http://www.msn.com/en-us/money/companies/wells-fargo-hit-with-class-action-lawsuit-over-sales-practices/ar-BBwFPuj?OCID=ansmsnnews11
Seriously, I won't do business with any bank where they violate trust and essentially steal my money from me. We are not talking about one rogue employee. It is management policy to give me accounts and credit cards without letting me know, without getting my consent, and to move my money without my agreement and charge me for said products? It seems hard to sink lower than that.
I saw the securities suit on the case reports today. Surprised it took so long for the plaintiffs lawyers to file
Quote from: CountDeMoney on September 23, 2016, 05:37:58 PM
Quote from: The Minsky Moment on September 23, 2016, 04:37:53 PM
Truly horrific reputational damage done to one of the few remaining strong and favorable banking brands, and for what?
You should ask Mortimer and Randolph the next time you're having cigars and brandy at the Heritage Club.
Can I has invite?
Quote from: The Minsky Moment on September 28, 2016, 12:12:52 AM
I saw the securities suit on the case reports today. Surprised it took so long for the plaintiffs lawyers to file
Probably delayed by plaintiff-side lawyers fighting over who got a piece of this. :D
Quote from: CountDeMoney on September 13, 2016, 06:25:30 PM
QuoteWells Fargo fired 5,300 workers for improper sales push. The executive in charge is retiring with $125 million.
By Renae Merle September 13 at 8:28 AM
Washington Post
The Consumer Financial Protection Bureau noted that the $100 million it will collect as part of the deal was the agency's "largest penalty" ever. The head of Office of the Comptroller of the Currency, a banking regulator, said its $35 million penalty would "demonstrate that such practices will not be tolerated and banks will be held responsible." "This is a major victory for consumers," said Los Angeles City Attorney Mike Feuer, touting the $50 million the city extracted from the bank.
But the fines being levied against Wells Fargo pale in comparison to the bank's yearly profit -- more than $20 billion in 2015.
Meant to discuss this a couple weeks ago.
These statements are implying that penalties should be based on who the offender is rather than what the offender did. The punishment is supposed to fit the
crime, not the
criminal. I don't think Wells Fargo's annual profit has any relevance to how their actions should be prosecuted.
Quote from: Baron von Schtinkenbutt on September 28, 2016, 11:02:06 AM
Quote from: CountDeMoney on September 13, 2016, 06:25:30 PM
QuoteWells Fargo fired 5,300 workers for improper sales push. The executive in charge is retiring with $125 million.
By Renae Merle September 13 at 8:28 AM
Washington Post
The Consumer Financial Protection Bureau noted that the $100 million it will collect as part of the deal was the agency's "largest penalty" ever. The head of Office of the Comptroller of the Currency, a banking regulator, said its $35 million penalty would "demonstrate that such practices will not be tolerated and banks will be held responsible." "This is a major victory for consumers," said Los Angeles City Attorney Mike Feuer, touting the $50 million the city extracted from the bank.
But the fines being levied against Wells Fargo pale in comparison to the bank's yearly profit -- more than $20 billion in 2015.
Meant to discuss this a couple weeks ago.
These statements are implying that penalties should be based on who the offender is rather than what the offender did. The punishment is supposed to fit the crime, not the criminal. I don't think Wells Fargo's annual profit has any relevance to how their actions should be prosecuted.
There is actually a good deal of argument to be had over this very point.
For corporate fines, there is a concern that if the penalty is simply a set amount - so many $ per violation - the violators will simply see it as a cost of doing business. So one school of thought is that a penalty has to be high enough to catch management's attention.
Another is that the penalty should be based on the amount necessary to rationally deter the violation. If the % chance of being caught times the penalty (plus the reputational damages) is less than the profit to be made from the violation, then it makes sense to commit the violation; so make the penalty at least one dollar more.
That assumes that companies are fully rational actors though.
Quote from: Malthus on September 28, 2016, 11:08:33 AM
There is actually a good deal of argument to be had over this very point.
For corporate fines, there is a concern that if the penalty is simply a set amount - so many $ per violation - the violators will simply see it as a cost of doing business. So one school of thought is that a penalty has to be high enough to catch management's attention.
Another is that the penalty should be based on the amount necessary to rationally deter the violation. If the % chance of being caught times the penalty (plus the reputational damages) is less than the profit to be made from the violation, then it makes sense to commit the violation; so make the penalty at least one dollar more.
That assumes that companies are fully rational actors though.
Those are good points. I think the issue comes down to actual damage done, though. It matters how much gain a corporation got, or stood to get, from the violations, not what their annual revenues are. If a company is going to make or save $5m from doing something wrong, but risks a $20m penalty for getting caught, they aren't going to take the risk of getting caught. It doesn't matter of their annual revenues are $10m or $10b; if the costs outweigh the gains they won't do it.
That's part of the issue with this particular case. By all accounts Wells Fargo didn't really make much off this scheme, certainly nowhere near the $135m they have had to pay so far. It was the low and mid level employees who did. It was a classic example of misaligned objectives. These employees were doing something illegal to get ahead in the corporate political game that was contrary to the long-term interests of the company.
Quote from: Baron von Schtinkenbutt on September 28, 2016, 02:34:51 PM
Quote from: Malthus on September 28, 2016, 11:08:33 AM
There is actually a good deal of argument to be had over this very point.
For corporate fines, there is a concern that if the penalty is simply a set amount - so many $ per violation - the violators will simply see it as a cost of doing business. So one school of thought is that a penalty has to be high enough to catch management's attention.
Another is that the penalty should be based on the amount necessary to rationally deter the violation. If the % chance of being caught times the penalty (plus the reputational damages) is less than the profit to be made from the violation, then it makes sense to commit the violation; so make the penalty at least one dollar more.
That assumes that companies are fully rational actors though.
Those are good points. I think the issue comes down to actual damage done, though. It matters how much gain a corporation got, or stood to get, from the violations, not what their annual revenues are. If a company is going to make or save $5m from doing something wrong, but risks a $20m penalty for getting caught, they aren't going to take the risk of getting caught. It doesn't matter of their annual revenues are $10m or $10b; if the costs outweigh the gains they won't do it.
That's part of the issue with this particular case. By all accounts Wells Fargo didn't really make much off this scheme, certainly nowhere near the $135m they have had to pay so far. It was the low and mid level employees who did. It was a classic example of misaligned objectives. These employees were doing something illegal to get ahead in the corporate political game that was contrary to the long-term interests of the company.
In this case, from what I understand management created a perverse incentive scheme that basically required its employees to commit fraud to keep their jobs, then blamed and fired the employees when massive fraud came to light. If the relevant criterion were 'how much the company stood to gain from the violation', the amount would be comparatively trivial, leading to a comparatively trivial fine; which, from the POV of enforcement, is an argument against using that method to determine the amount of the fine, as the company would not be deterred by a piffling fine from creating perverse incentives in the future.
I guess the counter-argument (from the first school of thought I mentioned) would be that the fine has to be enough to attract the attention of management, and enough to ensure that it keeps their attention so that they think twice about doing something similar again.
To determine that amount, it makes sense to look at how big the company is. If it was a small business, a million-dollar fine would be a huge incentive. A gigantic business wouldn't even notice that, though.
Bet they'd notice a firing squad. So would their friends.
Quote from: CountDeMoney on September 28, 2016, 02:50:38 PM
Bet they'd notice a firing squad. So would their friends.
I like regulation CdM-style. :D
Quote from: Malthus on September 28, 2016, 02:48:14 PM
In this case, from what I understand management created a perverse incentive scheme that basically required its employees to commit fraud to keep their jobs
"The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money. "
I think they were doing it to earn bonuses.
Quote from: Admiral Yi on September 28, 2016, 02:53:41 PM
Quote from: Malthus on September 28, 2016, 02:48:14 PM
In this case, from what I understand management created a perverse incentive scheme that basically required its employees to commit fraud to keep their jobs
"The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money. "
I think they were doing it to earn bonuses.
I could be wrong, but my understanding of it was that the employees had to meet sales targets (as well as earning bonuses), and that the targets were set at a level hard to reach without a certain amount of fudging. Fail to meet targets meant you were less likely to be kept on (as well as not earning any bonuses).
Quote from: Malthus on September 28, 2016, 02:59:53 PM
I could be wrong, but my understanding of it was that the employees had to meet sales targets (as well as earning bonuses), and that the targets were set at a level hard to reach without a certain amount of fudging. Fail to meet targets meant you were less likely to be kept on (as well as not earning any bonuses).
I don't see anything in the OP link to support that understanding. Are you looking at another article?
Quote from: Admiral Yi on September 28, 2016, 03:04:50 PM
Quote from: Malthus on September 28, 2016, 02:59:53 PM
I could be wrong, but my understanding of it was that the employees had to meet sales targets (as well as earning bonuses), and that the targets were set at a level hard to reach without a certain amount of fudging. Fail to meet targets meant you were less likely to be kept on (as well as not earning any bonuses).
I don't see anything in the OP link to support that understanding. Are you looking at another article?
I was reading other articles. I'll try to find some discussing that issue.
Edit: here's one:
http://www.wsj.com/articles/how-wells-fargos-high-pressure-sales-culture-spiraled-out-of-control-1474053044
QuoteMs. Kamar says laggards were threatened with termination and sometimes criticized in conference calls. In February 2011, she wrote to Mr. Stumpf in an email: "For the most part funds are moved to new accounts to 'show' growth when in actuality there is no net gain to the company's deposit base." She says she got no reply.
After working for Wells Fargo and its predecessor banks for 22 years, she was let go in 2011 for failing to meet sales targets, she says.
Quote from: Malthus on September 28, 2016, 02:48:14 PM
In this case, from what I understand management created a perverse incentive scheme that basically required its employees to commit fraud to keep their jobs, then blamed and fired the employees when massive fraud came to light. If the relevant criterion were 'how much the company stood to gain from the violation', the amount would be comparatively trivial, leading to a comparatively trivial fine; which, from the POV of enforcement, is an argument against using that method to determine the amount of the fine, as the company would not be deterred by a piffling fine from creating perverse incentives in the future.
I guess the counter-argument (from the first school of thought I mentioned) would be that the fine has to be enough to attract the attention of management, and enough to ensure that it keeps their attention so that they think twice about doing something similar again.
To determine that amount, it makes sense to look at how big the company is. If it was a small business, a million-dollar fine would be a huge incentive. A gigantic business wouldn't even notice that, though.
The question then is, why did management create such perverse incentives in the first place if the company didn't stand to gain from it? That doesn't sound like a rational course of action, in which case I wouldn't expect rational contemplation of fines, regardless of how large they are, to have much impact on future behavior.
Quote from: Baron von Schtinkenbutt on September 28, 2016, 04:46:03 PM
Quote from: Malthus on September 28, 2016, 02:48:14 PM
In this case, from what I understand management created a perverse incentive scheme that basically required its employees to commit fraud to keep their jobs, then blamed and fired the employees when massive fraud came to light. If the relevant criterion were 'how much the company stood to gain from the violation', the amount would be comparatively trivial, leading to a comparatively trivial fine; which, from the POV of enforcement, is an argument against using that method to determine the amount of the fine, as the company would not be deterred by a piffling fine from creating perverse incentives in the future.
I guess the counter-argument (from the first school of thought I mentioned) would be that the fine has to be enough to attract the attention of management, and enough to ensure that it keeps their attention so that they think twice about doing something similar again.
To determine that amount, it makes sense to look at how big the company is. If it was a small business, a million-dollar fine would be a huge incentive. A gigantic business wouldn't even notice that, though.
The question then is, why did management create such perverse incentives in the first place if the company didn't stand to gain from it? That doesn't sound like a rational course of action, in which case I wouldn't expect rational contemplation of fines, regardless of how large they are, to have much impact on future behavior.
I think the answer would be that while the amount the bank gained from actual frauds was probably pretty low, the amount the bank gained from creating the hothouse atmosphere of hyper-vigilance on pushing sales - which indirectly lead to the frauds - was considerable.
The story (in the article above your post) appears to go something like this:
- the bank set out to "cross sell" its financial products, to squeeze more revenue. Nothing illegal in that.
- The process was successful, so the bank pushed harder on it.
- In pushing harder, it created (or passively allowed lower-level types to create), over time, sales expectations that were unreasonable or that could not be met through actual sales.
- Management turned a willful blind eye to this fact, and allowed lower-level management to engage in activities - such as criticizing/firing people who failed to meet these unrealistic targets - that it knew, or reasonably ought to have known, would more or less force employees to commit fraud, if only to keep their jobs.
- This was almost certainly not the result of any one decision, but the accumulation of a bunch of smaller decisions. If sales are a good thing, then more sales must be better, right? Left unchecked (by anyone asking 'how does someone sell so much anyway?), this leads inevitably to frauds being committed. The actual money value of the frauds may be quite small, but it is a systemic problem.
Just got notice that the California State Treasurer is suspending "key business" with Wells. Not certain how far that goes.
Every bank does cross-selling these days, and have set in place a bonus/quota system for its sales staff. I wonder what makes Wells Fargo different.
I am considering if this is an opportunity to buy Wells Fargo shares.
This pattern keeps recurring.
The OWS/Berniebros crowd likes to think of the big banks as evil masterminds, implementing their fiendish plots to rob ordinary folks and shovel untold profits to the top 1 percenters. The reality is rather different. Far from being capable, Bond-villianesque "vampire squids" - the banks are sprawling bureaucracies that struggle to get a firm sense about what the hell is really going on in their own organization. Given the risk-return, its very believable Strumpf didn't know what was going on until it hit the fan, but in a way that is even more disturbing. Because it gives a sense how the banks blundered into the last financial meltdown and why it will almost certainly happen again.
Question: Can Vampire Squid ingest Haemoglobin or are they restricted to Haemocyanin?
Vampire Squid ingests all.
Quote
U.S.: Wells Fargo illegally repossessed 413 service members' cars
Wells Fargo will pay $24 million to settle allegations that it mistreated members of the military -- including illegally repossessing their cars.
The bank, already reeling from a scandal over fake accounts, will pay $4.1 million to settle Justice Department charges that it seized 413 cars owned by service members without a court order, a violation of federal law.
The Justice Department said the illegal repossessions took place from 2008 to 2015. The first complaint came from an Army National Guardsman in North Carolina who said the bank seized his car while he was preparing to deploy to Afghanistan.
Wells Fargo then auctioned his car and tried to collect a balance of $10,000 from his family, the Justice Department said.
The bank will pay $10,000 to each of the affected service members, plus lost equity in the cars with interest, and repair their credit.
Related: Wells Fargo worker retaliation claims rile up Congress
The bank was fined $20 million more by the Office of the Comptroller of the Currency for breaking three provisions of the same law by denying members of the military certain banking protections, including capping their interest rates at 6%. Those violations began in 2006, the OCC said.
Wells Fargo said in a statement that it apologizes for not living up to its commitment of ensuring that all service members "receive the appropriate benefits and protections."
"We have been notifying and fully compensating customers and will complete this work in 60 days," the company said.
Related: Lawmakers say Wells Fargo is like a 'criminal enterprise'
News of the penalties came as Wells Fargo and CEO John Stumpf faced the wrath of the House Financial Services Committee at a hearing about the millions of fake bank and credit card accounts, plus claims that it retaliated against whistleblowers.
The company is also facing lawsuits from shareholders, former employees and customers.
http://money.cnn.com/2016/09/29/news/wells-fargo-servicemembers-cars/index.html
QuoteWells Fargo will pay $24 million to settle
...
a violation of federal law.
Stop settling. Start prosecuting. Fuck.
Quote from: CountDeMoney on October 01, 2016, 11:50:04 AM
QuoteWells Fargo will pay $24 million to settle
...
a violation of federal law.
Stop settling. Start prosecuting. Fuck.
No kidding, what will it take.
Quote from: 11B4V on October 01, 2016, 11:50:55 AM
No kidding, what will it take.
Blessed are the Bomb Makers.
Service members interest is capped at 6%? What's the average interest rate people in the states pay for loans?
Quote from: HVC on October 01, 2016, 11:55:17 AM
Service members interest is capped at 6%? What's the average interest rate people in the states pay for loans?
I believe that's all part of the Servicemembers' Cocks Sucked For Relief Act. Because
Service Guarantees Citizenship!
Quote from: CountDeMoney on October 01, 2016, 12:14:47 PM
Quote from: HVC on October 01, 2016, 11:55:17 AM
Service members interest is capped at 6%? What's the average interest rate people in the states pay for loans?
I believe that's all part of the Servicemembers' Cocks Sucked For Relief Act. Because Service Guarantees Citizenship!
Fucking straight, Skippy. :blurgh:
I'm sorry you were drafted, Mr. Inner City Vietnam Dude.
http://money.cnn.com/2016/09/30/investing/wells-fargo-workers-wage-theft-overtime/index.html?iid=hp-stack-dom
:lol:
Quote
Wells Fargo made me work overtime -- without extra pay
Wells Fargo's notorious pressure-cooker culture led the bank to force some hourly employees to work late without overtime pay, former workers say.
The mandatory overtime took place during "call nights," where workers would call customers to sell them additional products like credit cards in an effort to meet the unrealistic sales goals.
"If we didn't hit our numbers, branch managers would make us stay after work for an hour, with no pay, to cold call customers and try to sell accounts," Graham Gourley, who worked as a Wells Fargo banker in Charlotte until 2012, told CNNMoney.
Powered by SmartAsset.com
SAVINGS RATES BY SAVINGS RATES BY
CNNMoney interviewed nearly a half-dozen additional former Wells Fargo (WFC) workers who said they too were frequently forced to work overtime without extra compensation as they chased their sales targets. This week, Wells Fargo scrapped the sales goals, amid the firestorm engulfing the bank.
Allegations that Wells Fargo violated federal law requiring overtime pay for hourly workers go beyond the fake account scandal. So-called "wage theft" complaints and related class action lawsuits go back to 1999, according to U.S. Senators who requested the Labor Department investigate whether the company "aggressively skirted overtime laws."
The letter to the Labor Secretary, signed by Senator Elizabeth Warren among others, cited the "staggering neglect by management," and pointed out how Wells Fargo stands out among all banks for repeatedly violating wage and hour provisions of the law "by denying employees overtime pay for hours worked in excess of 40 hours a week."
This week, the Labor Department has launched a "top-to-bottom review" of Wells Fargo complaints related to the Fair Labor Standards Act (FLSA) and other labor laws. Effective in 1999, FLSA requires employers to pay workers overtime rates of at least one and one-half times the regular rate after 40 hours of work in a workweek.
Related: I called the Wells Fargo ethics line and was fired
However, Gourley said he wasn't allowed to input his hours beyond 5:30 p.m., when his shift technically ended. If he did, Gourley, who was making $15 per hour plus commission at the time, said the managers would go in and change it.
Efforts to push back about unpaid wages were met with stiff resistance, Gourley said, echoing what other employees have also told CNNMoney.
"They said, 'Deal with it -- or leave,'" Gourley recalled. "I have a wife and two young children. I didn't have a choice. I had to keep working to make ends meet," he said.
Gourley gave in to his branch manager's instructions to open unauthorized accounts -- the problem that has landed Wells Fargo in hot water with regulators and Congress. Gourley said he tried to push back against the orders to open fake accounts, but was unsuccessful.
"We were forced to do that -- under the threat of termination. The entire branch was doing it," Gourley said.
Gourley said Wells Fargo bullied him into signing a false confession for opening unauthorized credit cards, leading to his termination in 2012. The firing put a red flag on his securities license, making it difficult to find another job.
"I lost my home and was forced to go on welfare and food stamps for almost a year," he said.
Gourley has since rebounded and is today happily employed at a restoration company.
Quote
Illinois suspends business with Wells Fargo
http://www.usatoday.com/story/money/2016/10/03/illinois-suspend-business-wells-fargo/91459014/
So sad. :lol:
http://www.msn.com/en-us/money/companies/wells-fargo-says-litigation-costs-could-exceed-provisions-by-dollar17b/ar-AAjQXtj?OCID=ansmsnnews11
Quote from: 11B4V on November 03, 2016, 11:07:32 AM
So sad. :lol:
http://www.msn.com/en-us/money/companies/wells-fargo-says-litigation-costs-could-exceed-provisions-by-dollar17b/ar-AAjQXtj?OCID=ansmsnnews11
More money for lawyers. :yeah:
http://money.cnn.com/2017/08/11/investing/wells-fargo-small-business-credit-card-fees/index.html
3.5 million fraudulently opened accounts.
http://www.msn.com/en-ca/money/topstories/wells-fargo-says-35-million-accounts-involved-in-scandal/ar-AAr2E6g?li=AAacUQk&ocid=spartandhp
At least Wells Fargo will be OK.
Too corrupt to fail