Wells Fargo uncovers up to 1.4 million more fake accounts

[GFED]

Wells Fargo (WFC) now says it has found a total of up to 3.5 million potentially fake bank and credit card accounts, up from its earlier tally of approximately 2.1 million. The additional fake accounts were discovered by a previously-announced analysis that went back to January 2009 and that reviewed the original May 2011 to mid-2015 period.

http://money.cnn.com/2017/08/31/inve...nts/index.html




How could anyone still bank with these guys?

[kane]

And how is nobody getting arrested for this? Is this not massive fraud?

[GFED]

Originally Posted by kane

And how is nobody getting arrested for this? Is this not massive fraud?

The biggest in history. Nobody cares.

[czarina]

Who created the accounts? Someone inside Wells Fargo, or was it that their criteria was so loose than anyone could open a fake account?

[Lewis11]

Jeez craziness

[kane]

Originally Posted by czarina

Who created the accounts? Someone inside Wells Fargo, or was it that their criteria was so loose than anyone could open a fake account?

In a nutshell, here is what happened:

An executive at Wells Fargo set a high goal for the sales team when it came to selling their customers various accounts and products the bank offers. This set sales quota's for the sales staff pretty high and people were getting fired for not meeting them. At some point, the sales people figured out how they can open fake accounts under existing customers' names and they did just that, making enough fake accounts to meet to exceed their quota.

Here's one way it worked. A Wells Fargo employee would see that you have a checking account with the company but nothing else. They would then open you up a savings account and transfer the minimum needed to start that account from your checking to savings. So it might only be a few bucks. They leave the money in there and the account active for a few days then once they see they have been credited with opening the new account they would close it and put the money back in the person's checking accounts.

Eventually, it got to be so common that they started making mistakes and people were getting credit cards they never applied for or found their accounts overdrawn because money had been taken for these fake accounts etc.

During all this time the CEO of Wells Fargo and other executives with stock options benefited greatly. All these fake accounts essentially cooked the books and made investors think things were going great so the stock went up in price.

Now they are being sued by a number of people including those who were fired for not reaching a quota that many were only able to reach because they were committing fraud.

[brassmonkey]

i banked there 20+ years even after they over draft me for 50 cent! gladly at another bank now

[Bladewire]

Originally Posted by kane

In a nutshell, here is what happened:

An executive at Wells Fargo set a high goal for the sales team when it came to selling their customers various accounts and products the bank offers. This set sales quota's for the sales staff pretty high and people were getting fired for not meeting them. At some point, the sales people figured out how they can open fake accounts under existing customers' names and they did just that, making enough fake accounts to meet to exceed their quota.

Here's one way it worked. A Wells Fargo employee would see that you have a checking account with the company but nothing else. They would then open you up a savings account and transfer the minimum needed to start that account from your checking to savings. So it might only be a few bucks. They leave the money in there and the account active for a few days then once they see they have been credited with opening the new account they would close it and put the money back in the person's checking accounts.

Eventually, it got to be so common that they started making mistakes and people were getting credit cards they never applied for or found their accounts overdrawn because money had been taken for these fake accounts etc.

During all this time the CEO of Wells Fargo and other executives with stock options benefited greatly. All these fake accounts essentially cooked the books and made investors think things were going great so the stock went up in price.

Now they are being sued by a number of people including those who were fired for not reaching a quota that many were only able to reach because they were committing fraud.

The execs knew about this and should be in jail, but because it's white collar crime they won't. BS

[kane]

Originally Posted by Bladewire

The execs knew about this and should be in jail, but because it's white collar crime they won't. BS

I agree. My understanding is the executive who was in charge of the sales team was forced to resign but got a sweet multi-million dollar golden parachute.

[overdose]

how is that a surprise, police are throwing innocent people to jail just to comply capture rates... welcome to the 21st century "wonderland" of capitalism, where the ability to prove something with documents equals the "truth" itself and numbers are even more important than human lives :D

[CurrentlySober]

FWIW, here is a true wells fargo bank story from years ago... I had arrived in LA for a couple of months and had an apartment booked at Oakwood in the valley. We were told that Oakwood didn't take cash, so we should goto the nearest bank and get a cashiers check instead... So we did... Nearest bank happened to be Wells Fargo...

Explained what I wanted to the guy, and e said no problem, and by the way, as we were there, would we like to open an account? I explained that we were only staying for a few months, were on tourist visas etc and didn't really see the point. The guys like, go on, its cool no fees and you can use your bank account while you are here for the next few months. Just need to see your passport and we will get it open straight away...

I asked what would happen when we went home and was told dont worry, just withdraw any cash and we will close the account...

It just seemed so incredibly sketchy that I declined the offer and a year or so later, when I WAS in the position to open an account, I went with BOA instead. Never did trust them after that first experience.

[kane]

Originally Posted by CurrentlySober

FWIW, here is a true wells fargo bank story from years ago... I had arrived in LA for a couple of months and had an apartment booked at Oakwood in the valley. We were told that Oakwood didn't take cash, so we should goto the nearest bank and get a cashiers check instead... So we did... Nearest bank happened to be Wells Fargo...

Explained what I wanted to the guy, and e said no problem, and by the way, as we were there, would we like to open an account? I explained that we were only staying for a few months, were on tourist visas etc and didn't really see the point. The guys like, go on, its cool no fees and you can use your bank account while you are here for the next few months. Just need to see your passport and we will get it open straight away...

I asked what would happen when we went home and was told dont worry, just withdraw any cash and we will close the account...

It just seemed so incredibly sketchy that I declined the offer and a year or so later, when I WAS in the position to open an account, I went with BOA instead. Never did trust them after that first experience.

My mom had a sketchy thing happen with Wells Fargo as well. She had been a customer of theirs for years with a checking and savings account. So, about a year ago my mom got online and started using the internet. She is 77 so it is all very new to her. And, of course, she fell for some scam and had someone steal her identity and take money out of her bank account. She contacted the bank and they opened up a case to look into it. In the meantime, they told it would take 10-20 days for the investigation to happen and her money to be credited back to her account. If her account stayed overdrawn (they drained her account then she wrote a check not realizing what had happened) she would get an overcharge fee and it didn't matter that the entire account and transaction were under investigation. They then immediately tried to get her to apply for a credit card or a line of credit that she could use to bring her account current while she waited.

Just felt shady to me that a longtime customer is a victim of identity theft and the first thing they think of is how to make more money off her.

[CoolMikey]

Originally Posted by kane

In a nutshell, here is what happened:

An executive at Wells Fargo set a high goal for the sales team when it came to selling their customers various accounts and products the bank offers. This set sales quota's for the sales staff pretty high and people were getting fired for not meeting them. At some point, the sales people figured out how they can open fake accounts under existing customers' names and they did just that, making enough fake accounts to meet to exceed their quota.

Here's one way it worked. A Wells Fargo employee would see that you have a checking account with the company but nothing else. They would then open you up a savings account and transfer the minimum needed to start that account from your checking to savings. So it might only be a few bucks. They leave the money in there and the account active for a few days then once they see they have been credited with opening the new account they would close it and put the money back in the person's checking accounts.

Eventually, it got to be so common that they started making mistakes and people were getting credit cards they never applied for or found their accounts overdrawn because money had been taken for these fake accounts etc.

During all this time the CEO of Wells Fargo and other executives with stock options benefited greatly. All these fake accounts essentially cooked the books and made investors think things were going great so the stock went up in price.

Now they are being sued by a number of people including those who were fired for not reaching a quota that many were only able to reach because they were committing fraud.

Just as likely is that sales reps were getting bonuses for opening X accounts, as is typical in a sales job. So, some shady reps figured: "I'll just do [what you described above] and score easy $2k, $5k or whatever bonus, if I get caught, in the worst case I'll blame my boss, get fired over it, but I certainly won't go to jail for it, I'll keep the bonus and my boss will take all the heat for my brilliant plan."

It makes little sense that new fake accounts were benefiting anyone but the reps who were getting performance bonuses. For example: a credit card that no one really signed up for and that no one uses generates no profit, but it counts as an additional "sale" that brings a rep one step closer to a bonus.

[GAMEFINEST]

Wells fargo are the biggest crooks

[kane]

Originally Posted by CoolMikey

Just as likely is that sales reps were getting bonuses for opening X accounts, as is typical in a sales job. So, some shady reps figured: "I'll just do [what you described above] and score easy $2k, $5k or whatever bonus, if I get caught, in the worst case I'll blame my boss, get fired over it, but I certainly won't go to jail for it, I'll keep the bonus and my boss will take all the heat for my brilliant plan."

It makes little sense that new fake accounts were benefiting anyone but the reps who were getting performance bonuses. For example: a credit card that no one really signed up for and that no one uses generates no profit, but it counts as an additional "sale" that brings a rep one step closer to a bonus.

There were reports I read when this all started coming out that described what you are saying. There were people making fake accounts and getting nice bonuses doing it. It benefited the company by making it look like the company was signing up a bunch of new accounts which should eventually mean more income for the company. Based on that info the stock went up by a good amount so those with stock options and stock holders benefited from it. Of course, many of those people had no idea what was going on. Eventually, it would have all come collapsing down on them as this was basically a form of a Ponzi scheme and eventually the bottom line would show most of those new accounts haven't generated any income and in many cases are no longer even on the books.

[CoolMikey]

Originally Posted by kane

There were reports I read when this all started coming out that described what you are saying. There were people making fake accounts and getting nice bonuses doing it. It benefited the company by making it look like the company was signing up a bunch of new accounts which should eventually mean more income for the company. Based on that info the stock went up by a good amount so those with stock options and stock holders benefited from it. Of course, many of those people had no idea what was going on. Eventually, it would have all come collapsing down on them as this was basically a form of a Ponzi scheme and eventually the bottom line would show most of those new accounts haven't generated any income and in many cases are no longer even on the books.

That's all true, so the way it all went down was more or less:

1. Reps committed fraud
2. Few managers/execs/etc may have known about it, but turned a blind eye, and so by dumb luck could have in theory profited from fraud in step 1. Which actually is not as easy as you think, as management typically gets long term options, to discourage reckless short term moves like this that would hurt the company long term.

So, who do you think should go to jail and why?

[kane]

Originally Posted by CoolMikey

That's all true, so the way it all went down was more or less:

1. Reps committed fraud
2. Few managers/execs/etc may have known about it, but turned a blind eye, and so by dumb luck could have in theory profited from fraud in step 1. Which actually is not as easy as you think, as management typically gets long term options, to discourage reckless short term moves like this that would hurt the company long term.

So, who do you think should go to jail and why?

My understanding is that there were several people in upper management, including the VP in charge of the sales group, that knew about this and, as you say, turned a blind eye. If that is true, they are, at the very least, an accomplice to a crime. Also, Every single person who created a fake account and committed this fraud should be investigated and potentially punished. The problem is that over 4,500 people have been fired from Wells Fargo in connection to this so it would be a huge investigation.

If nothing is done legally, there is nothing from stopping something like this happening again.

[King Mark]

Simple.com + Seed.co = I don't be having these problems.