And they did it all on their own.
On Thursday, federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts — without their customers knowing it — 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.
Hey they obviously thought that this was a legitimate way to ‘expand liquidity’ for themselves and fictitious others!
Cheers
Hans Rupprecht, Commander in Chief
1st Saint Nicolaas Army
Army Group ‘True North’
This is what happens when management assigns quotas and threatens to fire or demote those who fail to achieve them. All our Kanadian banks pressure employees to sell RRSPs, TFSAs and investment products. They also pressure them to get customers to open additional accounts. Tied selling is still going on but not as openly as a decade or two ago.
Your banker is not your friend.
Oh crap, I own stock in Wells Fargo.
We happen to bank with Wells Fargo and were interested to read this. A few months ago we noticed a regular monthly debit for a modest amount of money had been set up. Without going into details, it’s something that appeared as if it could well have originated within the bank, and achieved by someone with some “inside” knowledge. It was also something commissionable.
We investigated, complained, and the charges were promptly reversed. I’ve tried half-heartedly a couple of times to get an explanation, but even for a so-called “high value” customer, mum’s the word.
An interesting “coincidence,” and I wouldn’t be surprised if the extent of the chicanery is deliberately being minimized.
The only entity I trust less than big business is big government.
The US was saddled with Sarbanes-Oxley due to people like this who don’t think ethics applies to them.
I wonder what Trump would do… Roger Stone said yesterday (7th) that Hillary Is Panicking, Losing In Major Polls
https://www.youtube.com/watch?v=ORJZ-dFm9aA
Paul
Finger pointing at that conniving, brilliant bastard Putin in 5-4-3…
Reminds me of one of those, lesser Superman movies where Richard Pryor siphons off pennies from every transaction to get rich…parodied hilariously in Office Space. Sounds like someone at Wells Fargo is a fan also…
These financials are Hillary’s buddies. This will not help her.
Yeah wow scammed by banisters do shocking lol.
A banker is someone who wishes to lend you an umbrella when the sun is shining. One cloud in the sky and he wants it back !
Harper helped torpedo a tax on every international financial transaction at a G20 conference a while back. Trudeau will not oppose it as it creates a giant slush fund for environmental and social projects.
That’s pretty widespread – tests the plausibility that upper management wasn’t aware.
“This is what happens when management assigns quotas …”
Dead on!
James MacMaster. Any business small or large has to have incentives to create sales and grow. You obviously do not understand capitalism. It is a world of survival of the fittest Simple Darwin
theory. Corruption will always try to penetrate it. Just like politics and leadership and computer hacking.
Small Turdo potato a good example of illusion.
I do believe that our Canadian banks offer initiatives for employees to sell RRSPs, TFSAs etc. That is legitimate, and quite different than setting up phony accounts without the account holders knowing it’s happening. I deal with CIBC, no complaints from this customer. I told them once that I didn’t want phone calls to try and sell me investments, it’s never happened since. Great people, great service.
“James MacMaster. Any business small or large has to have incentives to create sales and grow. You obviously do not understand capitalism.”
Oh, I understand capitalism very well. And organizational behaviour.
Nic and Jamie – the question about capitalism in cases like this isn’t what the bosses are trying to incentivise, it’s what the incentives actually promote.
Thomas Sowell used the example of a windows factory in the USSR. They needed to produce a quota of square metres of glass windows each month. The factory boss asked for and received a definition along the lines of “sheets of glass with no gaps that fit into a number of standard window frames, stored in lifts at your loading bay”. The boss immediately removed half the air from the forklift tires used to move the windows to the loading bay, and the factory started producing 1mm thick windows. The wrong incentive was used – as long as the windows survived to the loading bay, the incentive was met.
After about 9 months word trickled up that no usable windows had come from this factory, they kept breaking in transit. Word came back down that the definition was changing. It was now cubic metres of glass, not square metres. So the factory cut back to producing 10% as many frames and filled them with 4″ or 6″ thick glass. Translucent and heavy, but it met the standard.
In a free economy a factory that didn’t produce a usable window for over a year would go out of business. Problem solved, someone who actually can produce usable windows will create them instead. For a suitably large (“too big to fail”) company or a government, that won’t happen. For someone who is trying to game the system to make their own life easier, there aren’t external controls or standards that will force them to do it correctly – they’ll produce 1mm thick windows as long as they can (and spend the extra spare time drinking vodka).
“First you need honest people”
Dad
Dad was right.
Sadly, the words “criminal charges” are absent in any of the reports I have seen aboutthis.
Not at all the same situation. In your scenario, workers were given inexact specs, and organized max production of it. They didn’t break laws. At WF, the fraudsters knew what they were doing was criminal, but wanted to get paid.
I am also a student of organizational design. The glass problem was one of feedback, doubtless due to the limited communication media available. The WF problem is one of verification. And if management is not vigilant, sales incentives will be abused.
I was data analyst at a telemarketing firm. Certain agents seemed to win the many daily contests used by management to boost morale. (thrilling games, like “sales bingo”,eg) it took me a while, but we were able to establish that one “winner” had a surprising number of her orders mysteriously cancelled the next week. Since no one had been checking, she had been doing bit for at least a year. When she heard we were looking, she promptly quit.
Independent verification is always important.