It was actually a pleasant diversion to read last week about the Wells Fargo scandal. That is, of course, because I wasn’t one of the over one million bank customers who, unbeknownst to them, were signed up for a bogus account or credit card in their name, something the bank has been doing since 2011.
The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.
"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.
Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.(Source: Money/CNN)
5,300 employees – roughly 1 out of 50. That’s a pretty stunning number to be on the take.
And where were the controls in all this? Didn’t any supervisors notice any strange bursts of activity? Hell of a good job there, Bud. Keep up the good work!
And they were firing people “over the last few years”. Ummm, once they started firing people, didn’t they bother to start putting controls – controls they should have had to begin with - in place to keep it from keepin’ on?
Oh, those cheater pants employees were plenty cagey. They took money out of existing accounts and funneled it into the new, bogus ones. But didn’t anyone notice that 1.5 million new bank accounts weren’t translating into any more deposits? Didn’t someone think it was strange the over half a million new credit card accounts weren’t actually charging anything? All they were doing was racking up annual fees.
Wells Fargo is on the hook to pay back all the victims, and they were also slapped with a hefty, $185M fine. (Well, it would be hefty if Wells Fargo wasn’t worth $250B.) Plus they had to write a mealy-mouthed apology:
"We regret and take responsibility for any instances where customers may have received a product that they did not request," Wells Fargo said in a statement.
“Received a product that they did not request.” Not to mention had money stolen from them by paying fees for those non-requested “products”. Not to mention the credit rating hits that some no doubt suffered.
Just think of poor little Opie, playing Winthrop in the Music Man, and how excited he was when the Wells Fargo wagon was a comin’ down the street, back in the day when Wells Fargo had stage coaches, and delivered the goods.
“It could be something for someone who is no relation, but it could be – yes it could be, yes it could be – something special, just for me.”
Yes, Winthrop, or it could be – yes it could be, yes it could be - a bank account opened in your name, with money taken from the account you knew about to fund it, sticking you with overdraft fees when there was less money in the account you were actually using than you thought. Or it could be – yes it could be, yes it could be - a credit card you didn’t want, but ended up paying the annual fee on anyway.
Anyway, if 5,300 employees have been fired, we have to assume that there were a lot more who knew something was going on. Did they just smirk and roll their eyes when Bud got the bonus for the third month in a row? Did they just sit there and stew when their supervisor encouraged them to be more like Bud? He’s a real go getter, don’t you know. This must have just been swell for morale.
There were whistleblowers. Among the complaints that the Consumer Financial Protection Bureau received, there were some from employees.
Still, the “survivors” have to be looking at the person at the next desk, and wondering who knew (and who said) what when.
I’m sure that the bank will have plenty of customers bailing on them. And plenty others double checking their statements.
There are few businesses where trust is more important. It’s not just the 5,300 employees who done wrong that’s the problem there. It’s the fact that the controls in place were so shoddy that all those cheeseball get-bonus-quick schemes worked.
I sure wouldn’t want to be in their compliance department…