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I highly recommend listening to a recent episode[1] of Planet Money. This was by no means an accident. As a short summary of one employee's plight: Ashley, wor

• hilop 10y ago
  "permanent blacklist"? That sounds like the High Tech Employees Lawsuit case, but a much easier win for a more sympathetic class of victim.
  • newjersey 10y ago
    Not to be overly dramatic but I would imagine it depends on who the jury sympathizes with.
    • EpicEng 10y ago
      Yes, and it's very likely they will sympathize moreso with a woman making 35k who was fired for reporting a crime.
    • carterehsmith 10y ago
      > it depends on who the jury sympathizes with It does, but can you really see a 'jury of peers' sympathizing with Wells Fargo in these circumstances?
      • newjersey 10y ago
        I do. I don't have a crystal ball or any insider information but I believe the stakes are higher for a corporation than for the plaintiff because defeating an assault could send a message to other potential claimants. (Think runaway juror) I don't know how much weight you'll give to some study but for What it is worth, here's a semi related article http://nytimes.com/2008/08/08/business/08law.html http://nytimes.com/2008/08/08/business/08law.html https://archive.fo/rTQIF https://archive.fo/rTQIF Of course, the defense knows this and this unwillingness to go to trial factors in when talking about exact dollars and cents of a settlement. At the end of the day, it doesn't even matter because I imagine most of the share holders of Wells Fargo are not in on any deal like this and arguably are the victim here more than the customers or the employees of Wells Fargo. I feel the same way when some city pays to settle a case brought up against a city employee's actions. Cases like this are a net loss to the society because likely nothing will change for the better. The cost of getting caught just gets factored into the cost of doing business. Sorry if I sound ambivalent or worse cynical. It is because I'm trying to tell myself that I'm wrong and things will change for the better if this woman wins her lawsuit against Wells Fargo. However, I know that this John Stumpf fellow will be back as either a consultant or a board member within a year. He didn't lose anything. Others have little incentive not to follow his lead.
  • yelnatz 10y ago
    According to the episode it was the U5 form[0]. Banks use the form as one of the employment references. [0] http://www.finra.org/industry/terminate-individuals-registration http://www.finra.org/industry/terminate-individuals-registra...
    • sillysaurus3 10y ago
      http://i.imgur.com/KM2fzuS.png http://i.imgur.com/KM2fzuS.png Every time she tries to get a job anywhere, that form will be checked by her potential employer?
      • sliverstorm 10y ago
        I mean, it makes sense, there's a certain amount of trust involved in finance so you'd like to know if a prospective employee had been fired in the past on suspicion of fraud/salami slicing/whatever
        • eric_h 10y ago
          It makes sense if humans were perfect. When an employee objects to unethical behavior and acts accordingly, it makes less sense.
          • disposablezero 10y ago
            Exactly. Libertarianism and communism seem like perfect utopias but "If all men were angels, no government would be necessary." Unfortunately, company insiders may see little difference in a "misbehaving" employee, regardless if it's in the public good and/or for personal gain, because limiting the threat of public exposure is often the paramount priority in the short-term, which may ultimately go against long-term business and customer relationships. And an "untrustworthy" bank is unlikely to survive on it's own for very long.
            • stickfigure 10y ago
              This form appears to be required by government. No matter what you think about libertarianism, this isn't it.
• Maxious 10y ago
  > upper management were willfully negligent of the impact that their insane sales goals had on the ethics of the company. > "Our average retail banking household has about six products with us. We want to get to eight ... and beyond," stated one Wells Fargo "brochure" called "The Vision and Values of Wells Fargo," according to the lawsuit. http://abcnews.go.com/Business/wells-fargo-bankers-accused-fraudulent-behavior-meet-sales/story?id=30813962 http://abcnews.go.com/Business/wells-fargo-bankers-accused-f...
  • jacquesm 10y ago
    One bank in NL (abn amro) is currently running an ad campaign with the slogan 'sign up for 3 more products and get 75 euros cash back' or something to that effect. It seems they've been going to the same seminar.
    • pdkl95 10y ago
      > It seems they've been going to the same seminar. Was it hosted by Alec Baldwin? Was he constantly yelling "Always be closing!"? ...we're adding a little something to this month's sales contest. As you all know, first prize is Cadillac Eldorado. Anybody wanna see second prize? Second prize's a set of steak knives. Third prize is you're fired. (Warning: very NSFW language) https://www.youtube.com/watch?v=H68eCEWKb7M https://www.youtube.com/watch?v=H68eCEWKb7M
• outworlder 10y ago
  What's this "permanent blacklist"? Is that something on the financial sector?
  • beachstartup 10y ago
    you bet your ass certain companies can add/edit/view secret notes on your credit history.
    • bananabill 10y ago
      I work for a huge card company please tell me more about this.
  • sangaya 10y ago
    It's FINRA's form U5. Wells listed her as discharged for "failing to perform job duties". You can see the form here: https://www.finra.org/sites/default/files/form-u5.pdf https://www.finra.org/sites/default/files/form-u5.pdf
• pasbesoin 10y ago
  A while back, credit reporting agencies hustled to adjust in the face of a few, but monetarily very successful, libel suits -- IIRC from memory. It would seem that, with the right legal representation -- one willing to go the distance -- Ashley might have grounds for a very significant libel suit. Wells Fargo management deserves to go to jail, in my opinion. However, it would also give me great joy to see them lose hundreds of millions of dollars to such suits. They wholeheartedly deserve it, as do some of the line employees who had to endure such abuse. Further, if the "gubmint" was serious about investigating and prosecuting criminal behavior, in addition to actually holding those responsible for policy accountable and jailing them, I'd like to see the laws for once enforced, at Federal and State levels, that require the government to cease doing business with financial establishments convicted of criminal offenses. We have laws. And we have resources for criminal investigations. For once, let's actually put them to use. If not, go after the politicians and government employees obstructing justice. If not with a formal charge, then by ending their careers.
  • carterehsmith 10y ago
    > that require the government to cease doing business with financial establishments convicted of criminal offenses. I guess that's why most of those settlements are worded so that there is no criminal offence. As in, "Company X agrees to pay $XBn to the gubmint, but admits no wrongdoing." I wonder if, once pushed to a higher court, such a clause (or the whole settlement) could be declared invalid. As in, if you did no wrong, why exactly are you giving $XBn to the government? Is that some kind of bribe? As in, I give government money, they don't bother me about the crap I did. Frankly the whole thing looks like a regular business contract between X and government, not a "guilty" judgment.
  • nattofriends 10y ago
    It is enforced. See Arthur Andersen.
    • travmatt 10y ago
      Funnily enough, I learned about Arthur Andersen in the context of why it is not enforced. Subsequent firms have committed far worse offenses.
• WhitneyLand 10y ago
  >>ripping apart the lives of employees and customers You don't think that's a teency bit mellowdramatic? That description seems perfect for Bernie Madoff, Enron, et al.
  • mey 10y ago
    Listen to the episode, it actually isn't melodramatic. They were hiring young bankers, trading on their connections until they ran dry, then dumping them, for a new batch. That's just the start and the environment goes down from there.
  • camperman 10y ago
    No, it's accurate. Having a bank steal your money when you're a customer is devastating. Having a bank fire and blacklist you because you were an ethical employee is also devastating. The only difference with Madoff and Enron is the scale.
  • Smerity 10y ago
    The entire situation is downright despicable. If you listen to the podcast, they made employees stay in an active crime scene (bank robbery) where the thief defecated all over the floor to make phone calls to try to open new accounts. Many employees (many with similar wages to Ashley) left due to health reasons caused due to the stress of the job. They were reduced to calling friends and relatives begging to create new accounts so they could meet quota. Ashley notes throwing up under her desk as fairly standard practice. If they didn't reach quota, they would be fired and blacklisted like Ashley was - though Ashley was fired for acting morally. Customers may not be aware of the impact that such products had on their credit ratings. Given credit ratings are incredibly complex to "fix" and you may only become aware of them when trying to make a large next step in life (loan for a house) ... And worst, the pensioner, who lived on minimal savings and who is not well equipped to sort out fraudulently opened accounts, was overdraft and unable to fix the situation himself. Who knows how many pensioners were sucked dry, what struggles they then faced on an empty bank account, unaware of what might even be the problem.
• nickbauman 10y ago
  Remember WF was one of the banks that failed the stress tests after the 2008 financial crisis. I've been trying to get away from WF for a while now, but no other bank can fill its shoes in terms of online services and ubiquity. Yet it has a culture of predatory capitalism where "your loss is our gain".
  • yeukhon 10y ago
    I lived in SF briefly and noticed the presence of WF everywhere in CA. I am from NYC, so Chase and Citi are more likely to be around. Just curious about "but no other bank can fill its shoes in terms of online services and ubiquity." I don't have that experience with other banks - I find the right agent and I get the right service, not every time, but definitely there are good people I can work with. Mind to clarify your experience with other banks?
    • noobermin 10y ago
      In SF more than everywhere else, would you ever need to withdraw cash? I'd think as long as you had apple-pay or a debit card you'd be fine.
      • pohungc 10y ago
        There are still restaurants that are cash only.
      • wcarron 10y ago
        There are many places that are cash only. Tattoo parlors (reputable ones, at that), restaurants, tips for valets, etc. Cash isn't dead just yet.
      • eric_h 10y ago
        I have very little experience in SF, but I'm sure that drugs are still largely a cash business there. Of course, a drug dealer with a square reader plugged into his iPhone would happen first in SF.
    • 10y ago
• pktgen 10y ago
  > This was by no means an accident. Thank you for pointing this out. I keep seeing comments to the effect of "Wells doesn't make any significant profit from opening bogus accounts (unused accounts are typically unprofitable to the company), so the executives couldn't have wanted this." These comments reflect a misunderstanding of modern executive compensation and the incentive structures set up for executives in large companies like this. What happened here is called control fraud [1], and it started at the top. Stumpf repeatedly bragged to investors about Wells' supposed cross-selling abilities, and these representations were priced into Wells' stock (being good at selling would suggest future growth). Because a higher stock price maximizes his own personal compensation (and his cash compensation, i.e. bonus, as well), the incentives down the line were set to maximize this metric. Tolstedt was in charge of the retail unit and her own compensation was substantially based on this same metric. This continued down to the low-level branch employee level, where the perverse incentive structure and ability to hire and fire (and threat of such) was guaranteed to produce massive fraud. The company and its shareholders do not benefit from this (they are victims, essentially); the responsible executives do, since this increases their personal compensation. [1] https://en.wikipedia.org/wiki/Control_fraud https://en.wikipedia.org/wiki/Control_fraud. You should read more about what William K. Black (former federal S&L regulator during the S&L crisis, at the Office of Thrift Supervision and its predecessors; Keating Five whistleblower; and current economics & law professor at UMKC) has to say on this topic in general.
  • somedangedname 10y ago
    > A control fraud will often obtain "investments that have no readily ascertainable market value", and then shop for appraisers that will assign unrealistically high values and auditing firms that will bless the fraudulent accounting statements. A whole new way to think about startup acquisitions!
    • nickpsecurity 10y ago
      Great observation. Im going to have to think more on this.
    • ianai 10y ago
• forgetsusername 10y ago
  >Wells Fargo put her onto a permanent blacklist that others in the industry pay attention to - she can't get a job anywhere else. I just listened to this episode last night, by chance. She speculates that she is on a blacklist, because she's having trouble finding work. But there's a more charitable (to the other banks) explanaton: she was a very low level employee who, true or not, just got fired for a massive fraud under investigation in the public eye. Maybe they're simply thinking "this might not be the best hire right now" and move to the next resume, of which there are probably many. Because, as much as people in management are responsible, there were also front line employees actively committing fraud here. They are also responsible. In fact more so. Her case is not the norm.
  • rbolkey 10y ago
    It sounded like they verified her speculation: SMITH: Ashley tried to get another job in banking, but she found that she never made it very far past the initial interviews. She suspected that Wells Fargo had put some sort of black mark on her record somewhere. And it turns out that is exactly the case. Wells Fargo wasn't joking around when they said they would make it hard for her to find work again. ARNOLD: No. Wells Fargo wrote her up on what's called a U5 document. It's like a report card for bankers basically. We tracked it down, and we asked Ashley to read what it said. ASHLEY: Failure to perform job duties. SMITH: Any bank - any bank that Ashley applies to will see this line, failed to do job duties. ARNOLD: The form does not mention that those job duties were the sales goals that everyone we spoke to said were unrealistic and that are at the center of a series of ongoing investigations at the state and federal level. SMITH: It just says failed to do job duties. It was the first time Ashley had seen it in print. ASHLEY: It's like having a black cloud that's kind of looming behind you. And I'm always trying to get in front of the cloud, out of the cloud, into the sunshine, but it's always there. http://www.npr.org/templates/transcript/transcript.php?storyId=497084491 http://www.npr.org/templates/transcript/transcript.php?story...
    • deleted 10y ago
      [deleted]
    • m_mueller 10y ago
• olegious 10y ago
  11 years ago, my first job out of college was as a "personal banker" for Wells Fargo. If I remember correctly, our goals were 8 "solutions" a day. Every few hours either a shift leader, assistant manager or the branch manager would come over and ask you "how many solutions do you have?" If you said a low number, you'd be told that was "unacceptable" and coached on how to generate more solutions (everything from forcing a customer to close and reopen accounts if they lost a debit card, rather than just use the built in lost debit card feature, to splitting large CDs into smaller CDs, to forcing old people without internet access to sign up for online access). If a retired customer came in and you didn't pitch them a reverse mortgage or a home equity line of credit, you would once again get a talking to. Sometimes managers would come over with signed printed account applications that they had sourced and they had you enter those accounts into the system. One of our "best"(read, high performing) bankers had opened accounts for a dead person (after the dead person's daughter came in to close their accounts), I reported her, nothing ever happened. It was an incredibly high pressure environment that led to unethical behavior and a situation in which customer service or doing what's right for the customer was not valued, I quit after a year.
  • dredmorbius 10y ago
    What rationale was offerred for forcing Internet access? What was Wells's interest in doing this?
    • olegious 10y ago
      We sold it as a "security precaution, if you create an online access account in our branch, hackers won't be able to create one for you." As far as WF's interest goes- this is one of those situations where the bank's strategy relied on having customers use as many products as possible, the thought was that if you use many banking products, you're less likely to switch banks. So all sales goals were set around the number of products (we called them "solutions") you sold. This is a rational strategy, but since things like debit cards or online accounts counted as solutions and the sales pressure was immense, the system could be gamed by selling solutions that really didn't help the company's overall goals. It was a broken incentive system.
• disposablezero 10y ago
  She should make the rounds to alt media: Thom Hartmann, The Jimmy Dore Show (TJDS) and TYT Interviews.
• jxramos 10y ago
  WOW this casts a whole new light on the idea of bank accounts for me, basically rent seeking via excess bank account ><