Wells Fargo to pay $575M settlement

**Smallsteps** · 12-29-2018, 07:14 PM

"a customer restitution review program to refund customers as part of the settlement as well as build a website �outlining the existing remediation programs.�

I guess I would have a few questions about how they did the y open accounts? I know they used personal info to open accounts but what money did they use?

I mean if they siphoned customer money to open accounts was that not returned as they identified and closed false accounts?
if they were lines of credit with no money, where was the loss to refund? maybe a dip or in some cases a bump in credit score but I do not see a monetary loss to be refunded or how they could calculate any real damages.

**james.hendrickson** · 12-29-2018, 08:15 PM

Smallsteps, they opened accounts in customers names without their consent. Thats a violation of multiple Federal and state laws.

To your question - where is the financial harm? In some cases, they charged people account related fees.

**disneysteve** · 12-30-2018, 05:21 AM

Originally posted by Smallsteps View Post

I guess I would have a few questions about how they did the y open accounts? I know they used personal info to open accounts but what money did they use?

I've wondered this too. I get how they could open an account. They have all of your info. But I can't open an account without depositing money. Where did the money come from? Or did they just fraudulently claim there was money that didn't really exist?

**disneysteve** · 12-30-2018, 05:24 AM

Originally posted by james.hendrickson View Post

To your question - where is the financial harm? In some cases, they charged people account related fees.

I just looked it up a bit. A lot of the fake accounts were credit cards and lines of credit, so no money was needed to open those. But when customers started getting credit cards they hadn't signed up for and statements from lines of credit they didn't have, that's when things broke down. Somehow they managed to open 1.5 million accounts before that happened which is astounding.

**Smallsteps** · 12-30-2018, 06:01 AM

I can see if fees were charged but in that case why was this not exposed sooner? When I do not use a card and have zero balance I do not get statements.
In the world of id theft this should have been caught sooner.

I know I watch my statements and would question fees or accounts that I did not recognize.

The issue goes back to a corporate mindset ( I have recently seen backed off by many companies).
I worked for a company that wanted people signed up for a "rewards program" and first offer money then offered punishment to not meet their goals.
( why the quotas ? They were sketchy about the details of why the wanted so much personal info, I believe the sold it)

MANY took shortcuts for example if someone paid by check or perhaps information on return slips etc, they took info and filled out forms to meet QUOTAS.
Lately I noticed although these sign ups are offered in retail etc, no longer the strong sell or holding up things to try to convince me I MUST have this.

This was an incentivized program encouraging employees to sell these accounts.
When you have either incentives or punishment for NOT meeting some quota there WILL be Some employees who will find a way.
1.5 million? Not a big surprise for a bank that size.
I would really like to see the corporate creator of the program identified and held accountable, hopefully they were fired.
If let go, they will join another bank and sooner or later propose same type of program

**disneysteve** · 12-30-2018, 07:01 AM

Originally posted by Smallsteps View Post

The issue goes back to a corporate mindset ( I have recently seen backed off by many companies).
I worked for a company that wanted people signed up for a "rewards program" and first offer money then offered punishment to not meet their goals.

I know a few people who worked at banks and ended up leaving (not Wells Fargo) because of the constant and tremendous pressure to upsell customers on services and products they didn't need or want. And there were most definitely quotas and consequences to not meeting them. It made for a very hostile work environment from what they told me. They just didn't know going in that they weren't really being hired as tellers; they were being hired as high pressure sales people.

**srblanco7** · 12-31-2018, 01:11 AM

When I read about Wells Fargo's issues (fraudulent account openings, improper foreclosures), I wonder how/why they still have any customers. I tend to avoid "big" banks (other than for certain rewards credit cards) and stick with credit unions. Anyone here still a WF customer?

**disneysteve** · 12-31-2018, 05:02 AM

Originally posted by srblanco7 View Post

I wonder how/why they still have any customers.

Most people simply don't care. If it didn't affect them directly (and sometimes even if it did) they aren't going to do anything. I have a relative who was impacted by the fake account thing. He's still with WF. He has his checking account, mortgage, and retirement accounts with them. He's in his 60s. He wasn't about to start over again and have to move all of his affairs elsewhere. The fraudulent account got closed. It didn't cost him a penny. As far as he was concerned, it was business as usual. Honestly, I can't say I would do it any differently.

**srblanco7** · 01-01-2019, 03:58 AM

Originally posted by disneysteve View Post

Most people simply don't care. If it didn't affect them directly (and sometimes even if it did) they aren't going to do anything. I have a relative who was impacted by the fake account thing. He's still with WF. He has his checking account, mortgage, and retirement accounts with them. He's in his 60s. He wasn't about to start over again and have to move all of his affairs elsewhere. The fraudulent account got closed. It didn't cost him a penny. As far as he was concerned, it was business as usual. Honestly, I can't say I would do it any differently.

Well - certainly the vast majority of their customers are likeminded. "Painful" though it might be, I believe I'd move my business to another institution. Not intending to hold anyone to an unreasonable standard, but these were systemic ethical issues (rather than just a few rogue employees).

**Smallsteps** · 01-02-2019, 03:53 AM

Originally posted by srblanco7 View Post

Well - certainly the vast majority of their customers are likeminded. "Painful" though it might be, I believe I'd move my business to another institution. Not intending to hold anyone to an unreasonable standard, but these were systemic ethical issues (rather than just a few rogue employees).

I am always amazed at the attitudes of some people to not change businesses after they do something like this but most people just do not want to inconvenience themselves.

A person I work with told me she started her bank accounts simply because WF gave her a car loan. Now years later she is still there.
We discussed banks because lately there have been many promo offers to get people to change banks. She never had checked out other places or anything. One CU with a good promo is located close to her but she was hesitant to even consider because she is used to things and thinks changing would be hard or confusing.

With no inside knowledge it is hard to say where the blame lies but I still feel ground level employees made a choice to do this based on WANTING to meet quota based on incentives. now if one person did it then told another how easy it was it spreads. I don't know how high up people were aware of this work around to meet unrealistic goals but find it unlikely that the blame is place on " the system" or faceless corporations it IS the people who did this.

**disneysteve** · 01-02-2019, 06:01 AM

Originally posted by Smallsteps View Post

most people just do not want to inconvenience themselves.

Definitely. Changing a checking account is a hassle. I've had the same account since the 1980s. The name of the bank has changed 4 or 5 times with buyouts but I've stayed on. I really don't care what bank it is as long as it is free. I'm not uprooting that and changing everything that is tied into that account just to get a $100 sign up bonus somewhere else. It's not worth the trouble to me.

Now a savings account is different. I had one with Capital One and when I learned that Ally paid better interest, I closed my account and switched it over. That was easy as that account had nothing attached to it.

**marc2242** · 02-28-2019, 06:42 AM

I had a credit card that was opened by Wells Fargo and was unauthorized.

**james.hendrickson** · 01-24-2020, 09:24 AM

From LinkedIn News:

Former Wells CEO banned from banking

Updated 23 hours ago

Former Wells Fargo CEO John Stumpf can never work at a bank again and must pay $17.5 million over scandals that erupted under his tenure, says the U.S. government. The bank — the nation’s fourth-largest by assets — has been mired in regulatory probes ever since its 2016 fake accounts scandal. The Office of the Comptroller of the Currency also said it’s investigating other former executives for their roles in creating millions of the accounts without customers knowing, according to CNBC. New Wells Fargo chief Charlie Scharf said the company will review the charges before making payments.

Source: here.

**Petunia 100** · 01-24-2020, 11:24 AM

Originally posted by Smallsteps View Post

I guess I would have a few questions about how they did the y open accounts? I know they used personal info to open accounts but what money did they use?

I have wondered this all along.

Wells Fargo to pay $575M settlement