5300 employees of Wells Fargo have been fired for creating fake accounts since 2011 in order to earn bonuses for hitting sales targets.
- They created 1,534,280 deposit accounts, “mov[ing] funds from customers’ existing accounts into newly-created accounts without their knowledge or consent”
- 565,443 credit card account were opened in customers’ names as well.
Copyright: jetcityimage / 123RF Stock Photo
Employees creating phony PIN numbers and fake email addresses for customers.
Wells Fargo has about 265,000 employees so although the bank is acknowledging they’ve fired 1% of their workforce it appears they’ve actually terminated double that.
Their statement on the incident says, “We regret and take responsibility for any instances where customers may have received a product that they did not request” although it’s of course more than just being given something of value without asking for it (the statement sounds like they did customers a favor), Wells Fargo not only agreed to a $185 million CFPB fine but also to refund $5 million in fees to customers that those customers didn’t know they were incurring until it was too late. They’ve settled with the LA City Attorney as well.
The most shocking thing here is the rampant scale — the thousands of employees were on average opening hundreds of fraudulent accounts apiece over the last 5 years.
Five thousand three hundred Obama voters, no doubt, with free ObamaCare and kiss subsidies to boot, creating fraudulent credit cards and shifting people’s savings with ZERO interest rates.
Really…..is it of any surprise here. lol
I would hope they prosecute as well as terminate those employees.
Yeah, Thanks Obama. No wait, isn’t this Hillary’s fault?
What kind of people are they hiring? Sick.
Really?? What facts make you reach that conclusion?
This has been going on for five years. Was every one in accounting and security asleep?
Did the perps have a website called BankerTalk?
Ah, the joys of incentive based pay. Pretty much any incentive designed to reward good behaviour leaves a loophole that rewards bad behaviour. For 5300 employees and 1.5M accounts, this loophole must have been pretty huge.
This must have been going on for years. I guess WF will be reviewing their compensation policies – what kind of crazy incentives did they have in place for so many people to take so much risk?!
I have trouble keeping track of 20 or so credit card accounts.
And when did it become acceptable to add gratuitous political comments to this hobby board? We get enough of that elsewhere. Thanks.
@ Melissa — Donald Trump is a complete idiot.
Why only fired? Shouldn’t they be arrested? I am not a lawyer, but I’m pretty sure filling out a credit application for someone else is a crime (fraud?). I know the lawyers like to go after the companies because they have all the money and that is how they get paid, but the real way to stop white collar crime is to incarcerate the perpetrators (and the managers that pushed them to do it).
WF new this was happening and only took this action after they were called out, sued etc. At least the other sleaze bag big banks have decent CCs :-).
Taking churning to a WHOLE new level
I left WF in Oct 2013 when I discovered funds were being moved without my knowledge. At the time, there was an investigation but I didn’t hang around long enough to find out what happened. Much later I found some crazy stuff on my credit report, nothing damaging but stuff I had no knowledge of.
Now with greater online access to accounts and reports its much easier to monitor and much harder for bank employees to move funds without being caught. One worries about cyber attacks and hackers but I never thought the problem would come from the inside of the institutions.
I understand that your comment section is open to all, but really, Melissa’s comment from 2:30pm is so nonsensical — this story has no political content whatsoever — that it should be swiftly removed. It’s thoroughly absurd and unrelated. It adds nothing to the discussion.
Donald Trump just needs to make a coherent English sentence for his supporters to vote for him. Because they are just as uneducated, ignorant push overs who will elect any white ass that promises their white asses prosperity. The jerk has changed his position so many times, his followers still think he has a position?
Hateful, racist white fuckers.
It’s completely inexcusable behavior by these employees. But if you’ve ever worked for a large retail bank, the quotas and pressure they place on these entry level workers would astound you. The sheer size and scope of this fallout shows how out-of-whack these big banks’ compensation policies are for entry-level employees to take that kind of risk! Idiocy!
Is ANYONE moderating these comments?
A friend works in Wells Fargo HR and told me years ago that this was an issue — the new account targets that were being set for tellers and CSRs were completely inappropriate and if you didn’t hit them, you were fired for non performing. To keep their jobs, people opened up multiple accounts for each of their family members and then, clearly, went further. Branch employees are under enormous pressure to deliver ever increasing volumes of new accounts, a major problem in smaller branches/areas where there is simply limited growth opportunity.
5,300 people cheating in the same is a systemic problem. How could it have gotten that widespread before someone with a conscience spoke up?
@AM
Youre under the impression that sales quotas are an incentive–they’re not. Meeting daily sales goals is a requirement to simply keep their jobs, and it’s not an option, much less a bonus. That the reason why Wells Fargo has a high employee turnover rate.
Wells Fargo CEO is often on TV defending Theranos CEO Elisabeth Holmes. When you have this scale of fraud it’s not an isolated incident its corporate culture. There is never only one cockroach and the question is what other questionable activities are going on in other departments like derivatives….
@Credit – you are a moron.
Yeah “Hateful, racist white fuckers.” that’s not hateful or racist.
now I see how the rampant 5x category MS abuse on their credit card went on for so long. Someone was getting cushy bonuses.
If 5,300 employees at Wells Fargo did this, I wonder how many employees at other banks are doing it.
Really scary.
People need to watch their accounts more closely.
George Vreeland Hill
In 2006 WF opened a line of credit without my request nor authorization. I identified this upon logging into my WF online banking. When I called to inquire why, they just gave me random excuses and saying it was a benefit they were providing to their customers. Well the annual line of credit annual fee was not a benefit; at least not for me.
So this has been going on for way longer than 5 years.
And they also paid $175 million for racist lending during 2004 to 2009:
http://usatoday30.usatoday.com/money/industries/banking/story/2012-07-12/wells-fargo-fine-discrimination-settlement/56170446/1
There is something fundamentally wrong with Wells Fargo. I just feel bad when I see the brand in the street or elsewhere ….
Eric W., your first sentence shows you understand. Everything after that is just being a whiney little bitch.
Remind me never to trust Wells Fargo for anything. Amazing this bank should even be allowed to remain open.
The largest institutional stakeholder in Wells Fargo is Warren Buffett’s Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) , which owns 9.45% of the bank.
I had heard anecdotally that WF was a miserable place to work because of the pressures to open new accounts constantly, and this kind of thing was happening.
@Kevin
That Trump is a demogouge and racist is acknowledged by even the fake messiah of your party, Ryan. And yet half of this country, that is predominantly white, wants to vote for him.
You lost any chance of civil dialog a while back. We aren’t falling for your fake civility any more.
So YOU ARE a moron and probably a blind, uneducated white apologist.
The scale of the problem indicates to me that Wells Fargo is likely underpaying their personal bankers and setting nearly unattainable targets. When I read this, I was angry with the bank, not the staff. Banks are notorious for paying their tellers and personal bankers starvation wages.
I do keep wondering… was the genius that concocted this “incentive” scheme fired? Were the fines high enough to make it not worthwhile for the bank to institute similar schemes in the future? These things have to really hurt for corporate culture to change.
In the meantime, it’s worth avoiding business with Wells Fargo just because of the high risk of fraud on their part. No sign-up bonus is worth the risk of permanent damage to your credit score or, generally, identity theft.
Blame capitalism. That puts short term profit above all else and puts human resources as a cost. Blame that party that coddles to business interests and sinks any legislation to protect workers.
That cfpb (which was opposed by that hateful party lead by lying, stupid orange blonde guy from new York. He quacks when he talks) was able to levy this fine tells you that this peactice would have continued if republicunts had their way. That party is full of just evil, evil two faced people.
Blame the fact that WF wouldn’t be around if the tax payer hadn’t bailed them out. Another example of why the government should stay out of business as much as possible.
This is not limited to Wells Fargo. A relative of mine who worked as a teller at a regional bank was always asking her relatives to open accounts so she can meet her quota. I think I did open one and closed it after 6 months. I don’t know what purpose it serves to open a bunch of dormant accounts other than to inflate the numbers for Wall Street. And then we need to talk about investment fraud engineered at senior management level.
Wow. How to sabatoge a business through unrealistic incentives.
I used to work at Wells Fargo. Believe me, it’s definitely an institutional issue and management turns a blind eye to many of these issues, as long as their sales numbers are high. But the credit card application churning is more alarming; I knew about checking accounts but not that!
No they won’t be prosecuted, because it is a white collar crime. Very sad that people who committ fraud don’t pay for what the crime or lives they destroy. We are victims of a Ponzi in the state of N.J. That is so big ,it would crumble the very financial industry. The thief that we have dealt with for the last nine years , works for Wells Fargo.He also worked for JMS financial, and Raymond James Financial. Three companies that let Investors with horrible past complaints work for them… I am sure our account was one of the fake accounts.
Good piece . I was enlightened by the details ! Does anyone know if I might be able to find a blank Wells Fargo Consumer Account App version to complete ?
As part of any settlement, WFC should be forced to change their stock listing to WTF.
See 18 U.S.C. Sec. 1014, which makes it a federal felony to make a willfully false statement to a federally insured lender in connection with the extension of credit. The penalty is a fine of up to $1 million plus up to 30 years in federal prison.
When I worked for the FTC, we actually got the U.S. Attorney in a federal district to indict a home improvement company and its officers under this section for backdating loan papers to prevent customers from using their 3 day rescission period.
I simply don’t understand why the U.S. Attorney in San Francisco isn’t looking to see how high he/she can go within the Wells Fargo organization to prosecute this scheme.
I would think the US Attorney is investigating, but the ones most easily convicted are likely those who were under the most pressure to perform or face the soup kitchen. For many reasons, even politically, that wouldn’t be very palatable.
Getting at those higher up and proving they directly ordered and actively participated in the commission of a felony is probably near impossible. It’s unlikely management conspired with front-line staff to open up fictitious accounts. A more likely scenario was “Open gen accounts today or you are fired!” and the worker then did what all his colleagues told him they were doing. If management later had a clue as to what was going down, they just turned a blind eye. Plausible denialability.
No US Attorney will ever indict 5,300+ people, especially for what amounts to a virtually victimless crime. Ever.
It’s not exactly victimless if WF charges you feesfor accounts you never opened and didn’t know had been opened until they came after you for the bogus fees and threatened to ruin your credit if you didn’t pay. Sounds like attempted larceny and extortion.
@ Claire: I’m sure some people lost a little money, but I doubt there are many who haven’t been reimbursed by WF. But aside from that, it’s virtually impossible 5,300+ WF front-line employees will be indicted. It also is exceedingly improbable they will find WF management that had provable knowledge of any crime.
While it may not be right, it’s just the nature of the beast.
Somebody delete the hateful comments, political or otherwise. This is a travel site, not a place for political rants. Go somewhere else, credit, to spew your hate.