May 6, 2015
Wells Fargo & Co (WF) has been sued by employees (current and former) and customers all across the nation for setting up “unwanted accounts, unwarranted fees”.
This lawsuit “contends the largest California-based bank violated state and federal laws by misusing confidential information and failing to notify customers when personal information was breached.”
Using “aggressive tactics” to coerce new customers, WF made it “difficult to correct the mistakes” made by WF and return fees to customers because of “high-pressure sales culture set unrealistic quotas, spurring employees to engage in fraudulent conduct to keep their jobs and boost the company’s profits.”
Los Angeles City Attorney Mike Feuer said: “In its push for growth, Wells Fargo often elevated its profits over the legal rights of its customers.”
The bank blames “a few rogue employees who the bank has appropriately disciplined or fired” for the lawsuit and investigation by Feuer and plans to “vigorously defend” itself from the lawsuit.
In a general statement, WF told the press: “We will vigorously defend ourselves against these allegations. Wells Fargo’s culture is focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members.”
Through training, audits and processes “that work together to support … our commitment to customers receiving only the products and services they need and will benefit from”, WF said they are working to improve internal systems.
Part of that training was the cross-selling strategy called “Going For Gr-Eight” which is a brochure for employees to push banking products onto households of existing customers to increase fee potential and over all profitability.
For 2 years , Feuer has been investigating how WF “staffers, fearing disciplinary action from managers, begged friends and family members to open ghost accounts” and forged signatures “and falsified phone numbers” of customers who did not want to open an account.
This practice drove WF success with an estimated “26% of the company’s revenue was from fee income, including those from credit and debit card accounts, trusts and investments.”
WF not only stole money from customers but “also damage their credit scores” and put some into collections to garner fees “for unauthorized accounts went unpaid”.
According to the 19-page complaint, WF would “sandbag” their customers; meaning “failing to open accounts when requested by customers, and instead accumulating a number of account applications to be opened at a later date.”
Another devious tactic WF employed was “bundling” or “incorrectly informing customers that certain products are available only in packages with other products such as additional accounts, insurance, annuities, and retirement plans.”
Journalist Peter Rudegeair wrote: “The complaint also provided a glossary of terms that it said Wells Fargo employees used to describe unsavory sales tactics, such as ‘pinning,’ or assigning personal identification numbers to customer debit cards without their authorization in order to open an online banking account, which counts toward the sales quota.”
Riley Fitzgerald commented on his experience: “Having worked there, I can say not every manager pushes the way they describe in the article. I have worked with some that have tried to force unethical behavior on me. I watched a lot of people get fired for it, but the way the goals are structured made me feel like Wells encouraged that behavior and turned a blind eye.”