5,300 Wells Fargo employees fired for creating over 2M phony accounts | Hacker News Reader

5,300 Wells Fargo employees fired for creating over 2M phony accounts

money.cnn.com

54 pointsojbyrne28 comments

And no one went to jail. It's becoming a bit of a refrain at this stage whenever there is wrongdoing in banking.

The scale of this ... there has to be more to the story. 5,300 people didn't co-ordinate this for years without anyone knowing, surely.

Apparently WF determined that 5,300 fireable people knew about it.

LA Times did an article back in 2013 on the high-pressure sales culture there that lead to these practices:

http://www.latimes.com/business/la-fi-wells-fargo-sale-press...

This is blatant fraud IMO, this settlement is just a slap on the wrist.

isn't it also theft?

From a memo sent today to WF employees: "At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action"

the sentiment expressed in that memo is difficult to reconcile with this WF memo to its customers:

We regret and take responsibility for any instances where customers may have received a product that they did not request"

that sounds like an apology if a clerk accidentally sent to a few customers a leather checkbook cover and charged them for it, even though the customer never ordered it.

Wells Fargo's remedies are pretty much limited to firing the guilty, giving them true references, and making the list of them available to the authorities. And they say they're making their customers whole, although I'm sure it's a bit late for a lot of them.

The memo, though, yeah, if someone created an account with money taken out of an existing one, and that caused them grief, and I think we're only talking about which degree of grief....

One reason to always keep at least two banking arrangements in place at all times, so you can, if necessary loudly in the bank lobby, close all your accounts and take all your money out on a moment's notice. No doubt without the drama, my father had to do that not many years ago at a bank where the account was set up for him in the '30s, I think, back when he was a pre-teen. Or not much later.

> if necessary loudly in the bank lobby, close all your accounts and take all your money out on a moment's notice.

Wouldn't you do that on Instagram or Twitter now?

Ah, you do have a point. I'm old fashioned enough not to use either, but why not embrace the power of "and" and do both?

In the real world, your targets includes the banking staff, who's attachment to their jobs might not be all that sticky, especially bank tellers who have no influence over policy but can relatively easily move to another bank.

They are talking about new accounts in the customers name. The banker isn't stealing the money for themselves. The bankers are doing it to meet quotas

But isn't the employee still committing a felony, like some sort of fraud? Shouldn't they all go to jail, or at least pay large fines?

not keeping the money but taking it for the sole reason of financial gain (bonus tied to quotas) is close enough, it seems to me, to "stealing money for themselves"

Wells Fargo policy sets quotas for bankers to open new accounts for customers.

Yeah it does seem implausible that 5300 people spontaneously committed the same fraud at the same time.. Must be some kind of policy driving this behavior.

5300 people doing this means it is impossible that no C-level executives knew.

If I stole one credit card application and created a fraudulent account, forging a signature, I'd be doing time.

If I ran a ring of 20 people stealing credit card applications and forging signatures, I'd be a fairly major federal case. Stephen Heymann would be giving talks on how his clever cyber crime people put me away.

If I was the Keyser Soze of fraudulent credit card account creation, with thousands of people working for me, they would put me in isolation in a federal supermax.

But when a pillar of American banking does it, the fine is a mosquito bite and nobody goes to jail.

EDIT: And we don't even get to find out the names of the individuals involved. This NEEDS a leak.

WF is an institution where there almost certainly are 5300 people who've never shook the hand of, much less meaningfully reported to, a C-level.

You are overstating corporate facelessness and deniability. 5300 is about 2% of Wells Fargo's global headcount, maybe 4% of US headcount. That's enough for top of that management hierarchy to be senior management. There is an easy way find out how high it goes. Keep squeezing the biggest fish you have caught and see who they name.

But since the names are secret, it's not possible to know how far DoJ got.

I'm not somehow advocating for executive impunity.

I'm just responding to ggp about c-levels; saying that it's very plausible that 5300 folks at WF are effectively isolated from c-levels.

Also, I tend to agree that secret corporate settlements do a disservice. Perhaps there should be a max life on the seal/secrecy.

I'm not sure who I can trust more, the salesman or the banker. =(

(I work at a bank and I'm a little jealous of the guy who left to work at the sausage factory... because at least they understand engineering processes.)

This is true. I make plant floor systems for the meat industry. Lots of modern tech being employed by your local food processor(s).

So they get fined $180m and then lay off an estimated $200m of employees.

IMO its the ones left behind to work for WF that actually pay the price; the remaining employees now have to increase their workload to cover for their missing peers...

And of course, senior management were totally ignorant of the practice.

This is such a strange scam. Surely the amount of fees/person shouldn't be enough to move the needle on a company like WF, not to mention how the incentive could adequately spread around 5300 people (that's less than 400 accounts/person).

WF would have done better to be like the cable and phone companies and simply add mystery monthly fees to the bill. Hardly anyone would notice.

As I read it, these sham accounts were opened by employees to meet various quotas, which are apparently based on accounts, not fee amounts.

This is true. A good friend of mine works at Wells Fargo, and has moved up the ranks from banker up to regional manager.

I never understood the pressure he was under to open new accounts. Not new customers, just new accounts for existing customers. For example, a new savings account to split your savings up into long term, vacation, college fund, home improvement.

As a banker he was supposed to open 40 new accounts a week, bare minimum.

One theory I had is that if you spread your money around like this, you're more likely to go below the minimums required, so therefore more likely to incur fees.

Too big to jail.

I can hardly wait until the next president finally does something about these get-off-with-a-slap-on-the-wrist banks!

This is the last straw I needed to dump Wells Fargo for good. I've never been nickeled and dimed at every corner like this by any other bank in my life.

Banks are fraudlent business by nature so it's not so surprising :)

> phony PIN numbers

Well... some tech geniuses right there! 5300 people. Opse that was a PIN number. Damnit.

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