It really is time to bust up the big banks.
Phantom Account Scandal Explained:
https://www.reddit.com/r/explainlikeimfive/comments/52buwv/eli5wells_fargo_scam
Bankers get a commission (extra money,) for certain actions. These usually invoice opening accounts. The more accounts you open, the more money you get.
Commission is a bonus. It’s not a requirement for your base salary. Many banks create a quota of sales that they expect their bankers to hit. When accounts are opened with certain products(direct deposit, online banking, etc) is profitable for the bank.
Wells Fargo had an environment, where if your bankers were not making enough commission, they were reprimanded.
Every location has a limited amount of customers. The quotas at Wells Fargo were much higher than achievable.
This is a tactic for any sales force to raise the bar higher to get your team to perform harder.
Unfortunately, the quotas were so high, and the pressure on the employees was equally high, many resorts to illegal actions to achieve those goals.
Bankers opened accounts without the owner’s permission. Credit cards, checking, savings, online banking, bill pay. They would transfer money around to these accounts, simulate the activity that would get them paid, and transfer it back.
The banker hits their numbers, three bank looks profitable, no one thinks about it. This goes on for years, and customers are asking about credit cards/accounts they never applied for.
Keep in mind, when we say bankers, we mean regular employees who make 25k-35k a year before commissions.
This type of stuff isn’t uncommon, but such a drastic breach across the board shows that when you create a highly pressured incentive-based system and punish those who perform poorly, you’ll create a corrupt system.
There was no one looking to see if these accounts were legitimate, they only cared that numbers were met.
WF is constantly in trouble. One would think they’d have straightened up their act decades ago.
I’ll never use them for the hell they put me through over trying to get new signature cards for a youth group. Another time they wanted my finger print to cash a little $20 check from a relative with the same last name. No way. No how.
I noticed a change at Wells Fargo about three years ago: I was pressured - virtually coerced - into closing an old checking account, and opening a new one. The employee was almost frenetically aggressive.
It was so unwarranted, it seemed almost creepy. I figured at the time that they must have sales quotas; now I suspect that there was a metaphorical gun being held to his head.
Currently transferring Wells Fargo funds to other more honest places. The reason is they are effectively bankrupt per one financial source. That explains the pressure to abscond more money.
Bad money chases bad.
How come Elizabeth Warren never called out Buffet?