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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 w

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.
        kbutler 9y ago
        Yes, it is, just as much as creating fake accounts is. The difference is just that you're stealing from your employer, instead of your employer's customers.
  - empath75 9y ago
    What's the downside risk? Getting a slap on the wrist fine that doesn't come close to clawing back profits?
    - tedunangst 9y ago
      I think it's very reasonably cynical to expect a bank to happily pay 50 million fines to make a billion in profit, but I don't think the numbers are working out in their favor here.
skuhn 9y ago
These accounts weren't created to make money for Wells Fargo, that's just a by-product of the mechanism used for this fraud. The fake accounts were used to make money for managers and executives at Wells Fargo by convincing shareholders, regulators and the company itself that performance was better than in reality. The victims of this type of fraud are not just the directly impacted consumers, whose damages are not just measured in unwanted fees but also in their damaged credit histories. The bank itself is also a victim -- which means unrelated customers who store their money, stock market investors, and the general public who may have some relationship with Wells Fargo through multiple degrees of separation. Just looking at the bank's misappropriated profits hardly tells the whole story of systemic and pervasive fraud.

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.
      - kbutler 9y ago
        Yes, it is, just as much as creating fake accounts is. The difference is just that you're stealing from your employer, instead of your employer's customers.
- empath75 9y ago
  What's the downside risk? Getting a slap on the wrist fine that doesn't come close to clawing back profits?
  - tedunangst 9y ago
    I think it's very reasonably cynical to expect a bank to happily pay 50 million fines to make a billion in profit, but I don't think the numbers are working out in their favor here.

skuhn 9y ago

These accounts weren't created to make money for Wells Fargo, that's just a by-product of the mechanism used for this fraud. The fake accounts were used to make money for managers and executives at Wells Fargo by convincing shareholders, regulators and the company itself that performance was better than in reality. The victims of this type of fraud are not just the directly impacted consumers, whose damages are not just measured in unwanted fees but also in their damaged credit histories. The bank itself is also a victim -- which means unrelated customers who store their money, stock market investors, and the general public who may have some relationship with Wells Fargo through multiple degrees of separation. Just looking at the bank's misappropriated profits hardly tells the whole story of systemic and pervasive fraud.