Wells Fargo Impropriety Endemic of Entire Financial Services Industry?

This story should be a wakeup-call to everyone with an account at a bank or financial services institution.  Ian Minto worked for a Wells Fargo branch in San Rafael, California, in 2001, and reported to his superiors that employees within the branch were opening fake accounts.  Even more disheartening, they were “flipping” mostly immigrant customers into accounts with higher monthly service fees and telling them the old accounts were no longer available.  Apparently these tactics and deceptions are endemic in the industry according to Pricewaterhousecoopers:

Nearly half off all global economic crimes now originate from financial firms, the most of any industry, according to a report last year by PricewaterhouseCoopers.  “Increased global competition and thinning margins have turned up the pressure on management to gain market share,” the report said. “Pressure to perform” has spiked as a main contributor to internal fraud — up to 20 percent of economic crimes last year, compared with 12 percent in 2014.

Here are some excerpts and a link to the full article, below.

In 2001, Minto was an assistant branch manager in San Rafael when he started to notice troubling behavior: Some employees were signing up unusually large numbers of customers. One particular banker recruited more than two dozen customers in a single day.  Suspicious, Minto said, he discovered the banker listed the same address for those 25 people. So he went to the address. It was a cemetery. “As it turns out, he said, employees were creating fraudulent checking and credit-card accounts so they could hit aggressive sales goals and earn more money

Those reforms didn’t come soon enough for Minto, who had just joined the San Rafael branch in late 2001 when he discovered employees were opening accounts in the names of real people without their consent. One tactic, outlined in his complaint, was to target immigrants.  Employees would transfer customers into accounts with higher fees and then tell them that the old account was no longer available if they complained. The new accounts would count toward their sales quota, Minto alleged in his complaint.

Wells Fargo whistle-blower finds vindication after 15 years

 

 

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About John Vashon

I own a family business that invests in and manages our own portfolio of mobile home parks.
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One Response to Wells Fargo Impropriety Endemic of Entire Financial Services Industry?

  1. This is stunning. I have accounts with them because they ate my bank years ago, and I need those accounts. Otherwise, I’d have nothing to do with them. And that’s before all this came to light. I am not the least bit surprised. And I’m sure the CEO knew all about it.

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