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The new Consumer Financial Protection Bureau levied the $185M in fines on Wells Fargo, small amount compared to their business but also they are required to hire an independent consultant to monitor their sale practices.
This is a small percentage of their employees but someone in charge of sales had to know they were gaming the system, or they really did not care to ask questions because sales were up.
The new Consumer Financial Protection Bureau levied the $185M in fines on Wells Fargo, small amount compared to their business but also they are required to hire an independent consultant to monitor their sale practices.
This is a small percentage of their employees but someone in charge of sales had to know they were gaming the system, or they really did not care to ask questions because sales were up.
The additional "faux" fees totaled $5mil over a couple years....for a division with 100k employees.
Wells Fargo has around 23billion in annual net income and so that division alone probably has at least 5 billion in annual revenues relative to maybe 2 million in additional faux fee income.
So 1/2500th of a percent in addition net income or.... 0.04%
Logically it doesn't follow that someone had to notice this because NOBODY ever sits at a planning meeting and says "wow! We're up 0.04%! What kind of crazy stuff is causing that!"
There are dishonest people out there at every level of life and the same holds true for business.
The idea that the rank and file would never cheat the system to make a quota and that it had to be done by the direction of upper management is hopelessly naïve. Heck, how many of readers here have a cell phone? I've had 2-3 different salesmen try to sell me warranty insurance on it and misrepresent that there wasn't a deductible (there is). Were they clueless or just dishonest? I don't know but they get a commission if they can sell you more stuff. Does it mean the CEO of Sprint is being nefarious or that salesmen will occasionally cheat?
She "stepped down" when it was uncovered. So, pretty much yeah....they fired her when it came out....just like you are suggesting.
It sounds like many posters here have mercifully been spared having to ever work for a large corporation for a living. As such, thinking that the boss of 100k people should totally know this was going on is frankly just your lack of experience in corporate America showing. Again, you've been fortunate.
In many of these cases they're actually ripping off their own employer and not the customers.
If you are referring to the comments I made, I would like to mention that I worked at a massive energy company whose CEO was forced to resign due to a massive safety scandal. Was the CEO responsible directly responsible for this safety scandal? Obviously not but it was still his job to enforce a strong safety culture when it was widely known within the company that there were a lot of problems with maintaining a safe work culture. From what is known so far from the WSJ and NYTimes, the high pressure sales culture was infamous throughout the industry and it was essentially an open secret within the company that unethical sales practices were tolerated. Wells Fargo even warned it workers not to create fake accounts in 2014 so it is obvious that they had some knowledge that this was a problem even before it blew up. This was a systemic problem within the company so I think laying blame on Carrie Tolstedt is not unwarranted.
The additional "faux" fees totaled $5mil over a couple years....for a division with 100k employees.
Wells Fargo has around 23billion in annual net income and so that division alone probably has at least 5 billion in annual revenues relative to maybe 2 million in additional faux fee income.
So 1/2500th of a percent in addition net income or.... 0.04%
Logically it doesn't follow that someone had to notice this because NOBODY ever sits at a planning meeting and says "wow! We're up 0.04%! What kind of crazy stuff is causing that!"
There are dishonest people out there at every level of life and the same holds true for business.
The idea that the rank and file would never cheat the system to make a quota and that it had to be done by the direction of upper management is hopelessly naïve. Heck, how many of readers here have a cell phone? I've had 2-3 different salesmen try to sell me warranty insurance on it and misrepresent that there wasn't a deductible (there is). Were they clueless or just dishonest? I don't know but they get a commission if they can sell you more stuff. Does it mean the CEO of Sprint is being nefarious or that salesmen will occasionally cheat?
Wells Fargo has over 200,000 employees in total, how many were involved strictly in new account sales, 100K, I don't think so?
They have managers of these units, someone had to notice the uptick and ask why they were choosing WF as opposed to JPM. The problem could be holding employees to unsustainable goals that can only be achieved by cheating the system. Misrepresenting a product is one thing opening up a product for a phony account in the customers name is quite another problem.
Some managers at some level had to be aware of the problem or they most certainly lacked due diligence, it's wither one or the other.
We already saw this show on a larger scale in 2008.
Im trying to figure out why you guys want to blame the people at the top for this, when this was less than one worker per branch opening up accounts.
Heck. you can go to any Bank website and open up 4 or 5 different accounts in your own name without ever dealing with a person.
Some of us are appalled that a corporation would foster this type of unethical sales culture that is straight out of Glengarry Glen Ross. 5,000 fired employees over a few years aren't just a few bad apples but indicates that there is a institutionalized problem. A close friend of mine worked at Wells Fargo in a completely different area but still had to deal with this crazy sales culture and saw shady things during his time there (his manager hired his cocaine dealer and would snort cocaine with him and brag about it openly).
This has been going on for 3 years, tellers making $11 an hour had sales goals to produce.
Quote:
“It seems as though you’d have to be willfully ignorant to believe that these goals are achievable through any other means,” Mr. Kellogg said.
“During our training we go through SO much training about ethics and how you CANNOT do that,” another former Wells teller wrote in the Reddit forum. “I got threatened to be fired as a teller with them because I wasn’t meeting my numbers. I told them I didn’t believe in trying to convince someone to spend money they don’t have, get what they don’t need.”
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After the practice of creating phony accounts was first reported in The Los Angeles Times in late 2013, the bank stepped up its monitoring and ethics training, former employees said. For its part, the bank said it had caught the behavior and started firing workers before the article appeared.
Wells Fargo is committed to putting our customers' interests first 100% of the time
So a 100% of the other times when they weren't setting up ghost accounts and defrauding their customers out of millions they were putting the customers' interests first? Oh I see, now I understand.
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