11 ms·

Wells Fargo uncovers up to 1.4M more fake accounts

184 points by cinquemb 9y ago

droopyEyelids 9y ago
https://newrepublic.com/article/144144/give-wells-fargo-corporate-death-penalty https://newrepublic.com/article/144144/give-wells-fargo-corp... Our government granted Wells Fargo’s corporate charter, and it can take it away.
- arca_vorago 9y ago
  I've been arguing the gov use that threat for a while now, nice to see I'm not the only one. I got the idea reading about the British and Dutch east India companies, as the charter was the sword of Damocles the gov had over the companies.
- anigbrowl 9y ago
  I said that at an earlier stage when far fewer fake accounts had been reported and it was considered too extreme a remedy. Oddly, many people who take a get-tough approach to law and order matters have a wholly different set of standards when it comes to punishing corporations.
- icelancer 9y ago
  >>it can take it away Ever since the "collapse" of the over-leveraged and irresponsible firms relying on subprime mortgages and BS credit swaps to boost their stock prices, the government is scared to death to allow anything like that to happen again. It would take far more than silly accounting fraud to do that, unfortunately.
QAPereo 9y ago
If this were a crime being committed by an individual on the same scale, what could that person expect to receive for a sentence? I really don't know the answer to that and I'm curious, but I strongly suspect that fines wouldn't be in it and it would be more of a custodial sentence.
- hashkb 9y ago
  Corporations are people until they commit a crime. Then they're corporations again.
  - rectang 9y ago
    Indeed. The individual actors within WF responsible made out 7 figures ahead (Tolstedt) or 8 figures ahead (Stumpf). There are not adequate disincentives for either the corporation or those within it to discourage such behavior.
    - stephengillie 9y ago
      Courts should have the legal power to "dissolve" a company, and this should be mandatory for some crimes. Workers would scrutinize a company's history a lot more closely if it were possible for their job to be dissolved for someone else's illegal activity. Or maybe that creates too much risk for the average person to accept.
- asmithmd1 9y ago
  Wells Fargo claims it isn't the leadership - it is just a few thousand bad apple low-level employees and they have been fired. http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html http://money.cnn.com/2016/09/08/investing/wells-fargo-create...
  - rectang 9y ago
    If you design a system that makes it inevitable that people will misbehave, you own their misbehavior.
    - trgv 9y ago
      Morally perhaps, but not legally. It's sad really. It seems to me that the whole Wells Fargo scandal is ultimately a lesson about how this company abused their employees and set them impossible tasks like "each customer should have X credit cards and Y accounts." But that's not what people seem to have taken from it. Instead, the whole incident has been presented as "just another big bank defrauding its customers." In reality though, the goal of the fraud was not to enrich anyone, it was just for these employees to keep their jobs. It feels like this whole incident could have spurred a conversation about the toxicity of these kind of unrealistic sales goals that provide no benefit to the customer, but it didn't.
cknight 9y ago
So one of the things I did for my project was to scan headlines related to corporate ethics, so I could start listing overviews of a company's record in this area. Needless to say, Wells Fargo has pretty much been filling its own page in ways that no other company has been able (with the exception of Uber): https://suitocracy.com/company/wells-fargo https://suitocracy.com/company/wells-fargo Seeing it all laid out like that really makes me wonder how it still gets by with so few consequences.
- a3n 9y ago
  > Seeing it all laid out like that really makes me wonder how it still gets by with so few consequences. Lobbying and campaign donations, combined with executives going through the revolving door between government and corporate employment.
- diogenescynic 9y ago
  >Seeing it all laid out like that really makes me wonder how it still gets by with so few consequences. Too big to fail. Check out the book "Chickenshit Club" if you want to see how this has all evolved since Enron and Arthur Andersen. The Justice Department is frequently paralyzed by politics and fear of causing economic harm to the country. Plus, several changes in legal precedents have made it much more difficult to prosecute companies and their executives.
  - e12e 9y ago
    Or maybe start with Michael Woodiwiss: "Gangster Capitalism: The United States and the Globalization of Organized Crime" for a depressing look at the bleak history of corporate criminal behaviour... https://www.amazon.com/Gangster-Capitalism-United-Globalization-Organized/dp/0786716711 https://www.amazon.com/Gangster-Capitalism-United-Globalizat...
    - nsebban 9y ago
      I stumbled on that book a few days ago, but the readers' comments seemed to imply the whole book was a heavy dramatization. Is it, in your opinion ?
johnwheeler 9y ago
All these headlines are way overblown by the media. If you think this type of behavior is restricted to wells fargo (like the media is making it seem), you're wrong. They just got caught. The total damages done to wells custormers are in the low millions, while wells fargo makes upwards of 20 billion a year. What I'm saying is it's a product of a bad incentive system--not criminal master planning by the managements to raise profits.
- a3n 9y ago
  That's the beauty of a "bad incentive system" that is designed by management: plausible deniability. This was the execution of evil master planning by management, which included indirect rather than direct instruction. They knew that what they rewarded would get done, no matter the law.
  - tedunangst 9y ago
    Seems like a lot of work to make a few million dollars. Not to mention downside risk.
    - a3n 9y ago
      And yet here we are, discussing a thing that I seriously doubt happened by random chance. Was there an internal forum where the thousands of bad apples came up with this? Or were they reacting to obvious and enforced management preferences?
      - tedunangst 9y ago
        It's pretty obviously bank tellers had perverse incentives. But I'm not sure it's so very different than a company that pays the QA a bonus for every bug found, then wonders why the bug tracker is filled with crap.
        empath75 9y ago
        The difference is that filing fake bugs isn't theft.
a3n 9y ago
No, they aren't fake accounts, they're real accounts, inflicted on customers against their will and without their knowledge, and they come with real damage.
- travmatt 9y ago
  I'm similarly fascinated by the use of the passive voice when they are describing Wells Fargo committing more crimes. Imagine if the crime was committed upon them instead: "Bank robber uncovers that he robbed bank for more money than originally admitted."
  - tedunangst 9y ago
    That's not passive voice.
    - briholt 9y ago
      Something like passive voice was used in that comment.
  - rhizome 9y ago
    Yeah, that's not passive voice, which in this context would be something like "the money was robbed from the bank," but you might be interested in the "past exonerative tense": 1. https://www.mcsweeneys.net/articles/an-interactive-guide-to-ambiguous-grammar https://www.mcsweeneys.net/articles/an-interactive-guide-to-... 2. https://www.washingtonpost.com/news/the-watch/wp/2014/07/14/the-curious-grammar-of-police-shootings/ https://www.washingtonpost.com/news/the-watch/wp/2014/07/14/... 3. https://en.wikipedia.org/wiki/Mistakes_were_made https://en.wikipedia.org/wiki/Mistakes_were_made Generally, this form of English can only be used by certain segments of business and society.
- LarryPage 9y ago
  fraud accounts
bdcravens 9y ago
While we consider Wells Fargo's ethical failures, worth noting that one of the startup darlings, Stripe, relies on Wells Fargo: https://stripe.com/wells-fargo/legal https://stripe.com/wells-fargo/legal
- uiri 9y ago
  That is an agreement with Wells Fargo's Canadian branch/subsidiary. Wells Fargo Canada appears to provide services solely to businesses (i.e. no retail banking) so I believe that this subsidiary has nothing to do with Wells Fargo retail branches behaving unethically.
  - throwaway613834 9y ago
    This is the kind of comment that just blows my mind (in a good way) when I read it. How do you suddenly just discover facts like this? Do you research it or do you just happen to know it beforehand? If it were me I would have just assumed it's the same Wells Fargo; it wouldn't have occurred to me to check that it's the one in Canada.
    - uiri 9y ago
      I clicked through and read the first sentence of the second paragraph: This Wells Fargo Addendum constitutes a legal agreement between you, Stripe, and Wells Fargo Bank, N.A., Canadian Branch (“Wells Fargo”). Then, I googled "Wells Fargo Canada" and found their website: http://www.wellsfargo.ca/locations http://www.wellsfargo.ca/locations The first sentence on their website is: Our team in Canada is dedicated exclusively to mid-sized and larger companies.
      - throwaway613834 9y ago
        Wait, what? That's not what I see: > This Wells Fargo Addendum constitutes a legal agreement between you, Stripe, and Wells Fargo Bank, N.A. and Wells Fargo Merchant Services, L.L.C. (collectively, “Wells Fargo”).
deleted 9y ago
[deleted]
pasbesoin 9y ago
At some point, the "disconnect" between shareholders (even and as, on a massive scale -- especially and specifically these "too big to fail" institutions) and their businesses needs to be breached. Businesses with chronic, systemic wrong-doing need to be put down. Wells Fargo is a prime, current candidate. If this were a Democratic administration, or a rational Republican one, I'd say, it's time for the FDIC (too bad Sheila Bair's no longer its head) to come in, take over, and sell off Wells Fargo. And that we have a Savings and Loan type investigation and prosecution, flipping the smaller fish until we get to the top and lock them up. (And strip them of their ill-gotten personal assets.) At this point, shareholders should be well informed as to where their growth and profits are coming from. If they want to invest in such behavior, they should equally reap the results, in financial terms. In other, if currently unrealistically ideal words, "No one is above the law." At some point, you have to act to effectively put the brakes on such behavior. Otherwise, it takes over.
- ajmurmann 9y ago
  It also touches on my biggest issue with corporate personhood. Corporations cannot go to jail. This needs to get fixed really bad. To me the solution is getting rid of the corporate personhood shield and prosecuting the individuals who actually made the decisions and send them to the same prisons we send drug dealers. No club fed.
- revmoo 9y ago
  Right? All these other banks are like "let's create sophisicated financial instruments to siphon money out of the global economy" and Wells Fargo is just like "what if we just steal money from people?" It's the most hood corporation lmao
- kbutler 9y ago
  > If this were a Democratic administration, or a rational Republican one, I'd say, it's time for the FDIC (too bad Sheila Bair's no longer its head) to come in, take over, and sell off Wells Fargo. #1) but you didn't when it was a democratic administration #2) why does the party of the president determine what you would say? The history of too big to fail is littered with discarded ethics and increasing moral hazard on both sides of the aisle (80s, 90s, 00s, and 10s).
flatfilefan 9y ago
Seems like forensic analysts did not do such a good job the first time. I wonder how could 1.4M fake accounts be missed when you do an audit looking for ... fake accounts?
- ben_jones 9y ago
  Were I a gambling man I'd wager either the analysis was incompetent by design from the very beginning, or the analysis was fine but the numbers were cherry picked to be technically accurate but utterly misleading to the public.
- cperciva 9y ago
  How do you figure out if an account is fake? You look for certain flags -- the customer is deceased, they're an implausible age, they live at a nonexistent address, or perhaps the paperwork to create the account wasn't signed. Presumably the 1.4M newly discovered fake accounts had some characteristics which they didn't look for on their first pass. Maybe the paperwork to create the account was signed, but it was all signed by the same bank employees rather than by customers. Maybe the paperwork to create one account got photocopied and submitted as the paperwork to create other accounts. You get the idea...
zeta0134 9y ago
This CNN article has an autoplaying video. All of my attempts to find a way to block the offending content have failed; it starts blocked, but as soon as I scroll down the page, some javascript animation moves the non-existent video to the sidebar. The side-video is hidden, but still loads and plays audio. Even worse, though I remember the original video being a mere 14 seconds, it is still playing some nonsense. Does it just loop new video downloads until I close the tab? Is there no mercy for bandwidth? [/frustrated]
- snakeanus 9y ago
  Try using umatrix.
- asdfologist 9y ago
  This abomination needs to stop. Bloomberg.com does this too and it's infuriating.
  - SN76477 9y ago
    Mute every new domain with an unmuted whitelist addon would be nice.
- freedomben 9y ago
  This is one of those things I am really hoping the Brave browser will fix. #plzohplz
- degenerate 9y ago
  Do these extensions stop the autoplay? Have not used myself: Chrome: https://chrome.google.com/webstore/detail/disable-html5-autoplay/efdhoaajjjgckpbkoglidkeendpkolai?hl=en https://chrome.google.com/webstore/detail/disable-html5-auto... FF: https://addons.mozilla.org/en-US/firefox/addon/disable-autoplay/ https://addons.mozilla.org/en-US/firefox/addon/disable-autop...
- ballenf 9y ago
  The new MacOS beta with Safari blocks it by default. Both the big and the small version. It's only failed to stop autoplay once, but that was an earlier beta.

184 points by cinquemb 9y ago

https://newrepublic.com/article/144144/give-wells-fargo-corporate-death-penalty https://newrepublic.com/article/144144/give-wells-fargo-corp... Our government granted Wells Fargo’s corporate charter, and it can take it away.

arca_vorago 9y ago
I've been arguing the gov use that threat for a while now, nice to see I'm not the only one. I got the idea reading about the British and Dutch east India companies, as the charter was the sword of Damocles the gov had over the companies.
anigbrowl 9y ago
I said that at an earlier stage when far fewer fake accounts had been reported and it was considered too extreme a remedy. Oddly, many people who take a get-tough approach to law and order matters have a wholly different set of standards when it comes to punishing corporations.
icelancer 9y ago
>>it can take it away Ever since the "collapse" of the over-leveraged and irresponsible firms relying on subprime mortgages and BS credit swaps to boost their stock prices, the government is scared to death to allow anything like that to happen again. It would take far more than silly accounting fraud to do that, unfortunately.

QAPereo 9y ago

If this were a crime being committed by an individual on the same scale, what could that person expect to receive for a sentence? I really don't know the answer to that and I'm curious, but I strongly suspect that fines wouldn't be in it and it would be more of a custodial sentence.

hashkb 9y ago
Corporations are people until they commit a crime. Then they're corporations again.
- rectang 9y ago
  Indeed. The individual actors within WF responsible made out 7 figures ahead (Tolstedt) or 8 figures ahead (Stumpf). There are not adequate disincentives for either the corporation or those within it to discourage such behavior.
  - stephengillie 9y ago
    Courts should have the legal power to "dissolve" a company, and this should be mandatory for some crimes. Workers would scrutinize a company's history a lot more closely if it were possible for their job to be dissolved for someone else's illegal activity. Or maybe that creates too much risk for the average person to accept.
asmithmd1 9y ago
Wells Fargo claims it isn't the leadership - it is just a few thousand bad apple low-level employees and they have been fired. http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html http://money.cnn.com/2016/09/08/investing/wells-fargo-create...
- rectang 9y ago
  If you design a system that makes it inevitable that people will misbehave, you own their misbehavior.
  - trgv 9y ago
    Morally perhaps, but not legally. It's sad really. It seems to me that the whole Wells Fargo scandal is ultimately a lesson about how this company abused their employees and set them impossible tasks like "each customer should have X credit cards and Y accounts." But that's not what people seem to have taken from it. Instead, the whole incident has been presented as "just another big bank defrauding its customers." In reality though, the goal of the fraud was not to enrich anyone, it was just for these employees to keep their jobs. It feels like this whole incident could have spurred a conversation about the toxicity of these kind of unrealistic sales goals that provide no benefit to the customer, but it didn't.

cknight 9y ago

So one of the things I did for my project was to scan headlines related to corporate ethics, so I could start listing overviews of a company's record in this area. Needless to say, Wells Fargo has pretty much been filling its own page in ways that no other company has been able (with the exception of Uber): https://suitocracy.com/company/wells-fargo https://suitocracy.com/company/wells-fargo Seeing it all laid out like that really makes me wonder how it still gets by with so few consequences.

a3n 9y ago
> Seeing it all laid out like that really makes me wonder how it still gets by with so few consequences. Lobbying and campaign donations, combined with executives going through the revolving door between government and corporate employment.
diogenescynic 9y ago
>Seeing it all laid out like that really makes me wonder how it still gets by with so few consequences. Too big to fail. Check out the book "Chickenshit Club" if you want to see how this has all evolved since Enron and Arthur Andersen. The Justice Department is frequently paralyzed by politics and fear of causing economic harm to the country. Plus, several changes in legal precedents have made it much more difficult to prosecute companies and their executives.
- e12e 9y ago
  Or maybe start with Michael Woodiwiss: "Gangster Capitalism: The United States and the Globalization of Organized Crime" for a depressing look at the bleak history of corporate criminal behaviour... https://www.amazon.com/Gangster-Capitalism-United-Globalization-Organized/dp/0786716711 https://www.amazon.com/Gangster-Capitalism-United-Globalizat...
  - nsebban 9y ago
    I stumbled on that book a few days ago, but the readers' comments seemed to imply the whole book was a heavy dramatization. Is it, in your opinion ?

johnwheeler 9y ago

All these headlines are way overblown by the media. If you think this type of behavior is restricted to wells fargo (like the media is making it seem), you're wrong. They just got caught. The total damages done to wells custormers are in the low millions, while wells fargo makes upwards of 20 billion a year. What I'm saying is it's a product of a bad incentive system--not criminal master planning by the managements to raise profits.

a3n 9y ago
That's the beauty of a "bad incentive system" that is designed by management: plausible deniability. This was the execution of evil master planning by management, which included indirect rather than direct instruction. They knew that what they rewarded would get done, no matter the law.
- tedunangst 9y ago
  Seems like a lot of work to make a few million dollars. Not to mention downside risk.
  - a3n 9y ago
    And yet here we are, discussing a thing that I seriously doubt happened by random chance. Was there an internal forum where the thousands of bad apples came up with this? Or were they reacting to obvious and enforced management preferences?
    - tedunangst 9y ago
      It's pretty obviously bank tellers had perverse incentives. But I'm not sure it's so very different than a company that pays the QA a bonus for every bug found, then wonders why the bug tracker is filled with crap.
      - empath75 9y ago
        The difference is that filing fake bugs isn't theft.

a3n 9y ago

No, they aren't fake accounts, they're real accounts, inflicted on customers against their will and without their knowledge, and they come with real damage.

travmatt 9y ago
I'm similarly fascinated by the use of the passive voice when they are describing Wells Fargo committing more crimes. Imagine if the crime was committed upon them instead: "Bank robber uncovers that he robbed bank for more money than originally admitted."
- tedunangst 9y ago
  That's not passive voice.
  - briholt 9y ago
    Something like passive voice was used in that comment.
- rhizome 9y ago
  Yeah, that's not passive voice, which in this context would be something like "the money was robbed from the bank," but you might be interested in the "past exonerative tense": 1. https://www.mcsweeneys.net/articles/an-interactive-guide-to-ambiguous-grammar https://www.mcsweeneys.net/articles/an-interactive-guide-to-... 2. https://www.washingtonpost.com/news/the-watch/wp/2014/07/14/the-curious-grammar-of-police-shootings/ https://www.washingtonpost.com/news/the-watch/wp/2014/07/14/... 3. https://en.wikipedia.org/wiki/Mistakes_were_made https://en.wikipedia.org/wiki/Mistakes_were_made Generally, this form of English can only be used by certain segments of business and society.
LarryPage 9y ago
fraud accounts

bdcravens 9y ago

While we consider Wells Fargo's ethical failures, worth noting that one of the startup darlings, Stripe, relies on Wells Fargo: https://stripe.com/wells-fargo/legal https://stripe.com/wells-fargo/legal

uiri 9y ago
That is an agreement with Wells Fargo's Canadian branch/subsidiary. Wells Fargo Canada appears to provide services solely to businesses (i.e. no retail banking) so I believe that this subsidiary has nothing to do with Wells Fargo retail branches behaving unethically.
- throwaway613834 9y ago
  This is the kind of comment that just blows my mind (in a good way) when I read it. How do you suddenly just discover facts like this? Do you research it or do you just happen to know it beforehand? If it were me I would have just assumed it's the same Wells Fargo; it wouldn't have occurred to me to check that it's the one in Canada.
  - uiri 9y ago
    I clicked through and read the first sentence of the second paragraph: This Wells Fargo Addendum constitutes a legal agreement between you, Stripe, and Wells Fargo Bank, N.A., Canadian Branch (“Wells Fargo”). Then, I googled "Wells Fargo Canada" and found their website: http://www.wellsfargo.ca/locations http://www.wellsfargo.ca/locations The first sentence on their website is: Our team in Canada is dedicated exclusively to mid-sized and larger companies.
    - throwaway613834 9y ago
      Wait, what? That's not what I see: > This Wells Fargo Addendum constitutes a legal agreement between you, Stripe, and Wells Fargo Bank, N.A. and Wells Fargo Merchant Services, L.L.C. (collectively, “Wells Fargo”).

deleted 9y ago

[deleted]

pasbesoin 9y ago

At some point, the "disconnect" between shareholders (even and as, on a massive scale -- especially and specifically these "too big to fail" institutions) and their businesses needs to be breached. Businesses with chronic, systemic wrong-doing need to be put down. Wells Fargo is a prime, current candidate. If this were a Democratic administration, or a rational Republican one, I'd say, it's time for the FDIC (too bad Sheila Bair's no longer its head) to come in, take over, and sell off Wells Fargo. And that we have a Savings and Loan type investigation and prosecution, flipping the smaller fish until we get to the top and lock them up. (And strip them of their ill-gotten personal assets.) At this point, shareholders should be well informed as to where their growth and profits are coming from. If they want to invest in such behavior, they should equally reap the results, in financial terms. In other, if currently unrealistically ideal words, "No one is above the law." At some point, you have to act to effectively put the brakes on such behavior. Otherwise, it takes over.

ajmurmann 9y ago
It also touches on my biggest issue with corporate personhood. Corporations cannot go to jail. This needs to get fixed really bad. To me the solution is getting rid of the corporate personhood shield and prosecuting the individuals who actually made the decisions and send them to the same prisons we send drug dealers. No club fed.
revmoo 9y ago
Right? All these other banks are like "let's create sophisicated financial instruments to siphon money out of the global economy" and Wells Fargo is just like "what if we just steal money from people?" It's the most hood corporation lmao
kbutler 9y ago
> If this were a Democratic administration, or a rational Republican one, I'd say, it's time for the FDIC (too bad Sheila Bair's no longer its head) to come in, take over, and sell off Wells Fargo. #1) but you didn't when it was a democratic administration #2) why does the party of the president determine what you would say? The history of too big to fail is littered with discarded ethics and increasing moral hazard on both sides of the aisle (80s, 90s, 00s, and 10s).

flatfilefan 9y ago

Seems like forensic analysts did not do such a good job the first time. I wonder how could 1.4M fake accounts be missed when you do an audit looking for ... fake accounts?

ben_jones 9y ago
Were I a gambling man I'd wager either the analysis was incompetent by design from the very beginning, or the analysis was fine but the numbers were cherry picked to be technically accurate but utterly misleading to the public.
cperciva 9y ago
How do you figure out if an account is fake? You look for certain flags -- the customer is deceased, they're an implausible age, they live at a nonexistent address, or perhaps the paperwork to create the account wasn't signed. Presumably the 1.4M newly discovered fake accounts had some characteristics which they didn't look for on their first pass. Maybe the paperwork to create the account was signed, but it was all signed by the same bank employees rather than by customers. Maybe the paperwork to create one account got photocopied and submitted as the paperwork to create other accounts. You get the idea...

zeta0134 9y ago

This CNN article has an autoplaying video. All of my attempts to find a way to block the offending content have failed; it starts blocked, but as soon as I scroll down the page, some javascript animation moves the non-existent video to the sidebar. The side-video is hidden, but still loads and plays audio. Even worse, though I remember the original video being a mere 14 seconds, it is still playing some nonsense. Does it just loop new video downloads until I close the tab? Is there no mercy for bandwidth? [/frustrated]

snakeanus 9y ago
Try using umatrix.
asdfologist 9y ago
This abomination needs to stop. Bloomberg.com does this too and it's infuriating.
- SN76477 9y ago
  Mute every new domain with an unmuted whitelist addon would be nice.
freedomben 9y ago
This is one of those things I am really hoping the Brave browser will fix. #plzohplz
degenerate 9y ago
Do these extensions stop the autoplay? Have not used myself: Chrome: https://chrome.google.com/webstore/detail/disable-html5-autoplay/efdhoaajjjgckpbkoglidkeendpkolai?hl=en https://chrome.google.com/webstore/detail/disable-html5-auto... FF: https://addons.mozilla.org/en-US/firefox/addon/disable-autoplay/ https://addons.mozilla.org/en-US/firefox/addon/disable-autop...
ballenf 9y ago
The new MacOS beta with Safari blocks it by default. Both the big and the small version. It's only failed to stop autoplay once, but that was an earlier beta.