Wells Fargo Scandal - Fake Accounts / Thousands Fired (1 Viewer)

Saint_Ward

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This might be better served in the EE, but since the Federal government is involved, I left I there.

Wells Fargo scandal: Elizabeth Warren wants answers - Sep. 12, 2016

Warren joined four other Senate Democrats on Monday in demanding the U.S. Senate banking committee hold "immediate" hearings to "fully investigate the matter."


"This was a staggering fraud," Warren told CNN's Jake Tapper last week.

"The magnitude of this situation warrants a thorough and comprehensive review," reads the Senators' letter to Richard Shelby, the Republican chairman of the committee.


The call for Stumpf to testify comes amid national outrage after federal regulators last week said Wells Fargo (WFC) secretly created millions of unauthorized bank and credit card accounts since 2011. The bank said it has fired 5,300 employees over the past few years for improper sales tactics.

The Consumer Financial Protection Bureau, the regulatory brainchild of Warren, slapped Wells Fargo with a record $100 million fine over the illegal activity. All told, including fines from other authorities, the bank has to pay penalties totaling $185 million.
The story is here.

5,300 Wells Fargo employees fired over 2 million phony accounts - Sep. 8, 2016

The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.

The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent, regulators say. The CFPB described this practice as "widespread." Customers were being charged for insufficient funds or overdraft fees -- because there wasn't enough money in their original accounts.

Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers' knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.

The CFPB said Wells Fargo will pay "full restitutions to all victims."
To think, would Wells Fargo had even fessed up to this (or known about it, as they allege) had the Consumer Financial Protection Bureau not nailed them?

1.5 Million fake deposit accounts, and around half a million fake credit card accounts. It's staggering.
 

Alan

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I read it Ward. The implications are just too much for me to ingest at present, as either way is a gross oversight (or worse) that cannot be tolerated. I will wait patiently as the story unfolds but at present my faith in getting to the bottom of the fiasco regarding ANOTHER bank has me fit to be tied.
 
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Saint_Ward

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I think Warren is right. This seems too big, too concentrated to not have been directed by some level of upper management. And if the executives really do have no idea of what was going on, then the bank is just too big to properly manage and should be broken up into smaller companies.
 
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Saint_Ward

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I have a friend who just left Chase bank and was complaining about how she was forced to sell additional banking products to customers and would get yelled at if she didn't meet her quota.
 

RussTKD

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Nowadays, banking is sales sales sales.

If I had to speculate, this was directed from a way-higher-up manager to fudge sales numbers giving him and his team bigger bonuses.
 

SaintJ

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If we had less regulation and more limited government, the free market would take care of all of this. People would simply go to the better banks that provided more reliable service, and the problem would take care of itself.

It's the over-regulation that's strangling the financial industry and making us less competitive.
 

CountWhoDat

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Banks are desperately trying to vacuum up fees now that they have trouble making money lending on the rate spread with near-0% rates.

When the Mitt Romneys and Trumps of the world talk about "less burdensome" regulations on the financial industry, what they mean is allowing **** like this to go down so that these companies can keep their shareholders happy and their customers in the dirt where the peons belong.
 

Taurus

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This might be better served in the EE, but since the Federal government is involved, I left I there.

Wells Fargo scandal: Elizabeth Warren wants answers - Sep. 12, 2016



The story is here.

5,300 Wells Fargo employees fired over 2 million phony accounts - Sep. 8, 2016



To think, would Wells Fargo had even fessed up to this (or known about it, as they allege) had the Consumer Financial Protection Bureau not nailed them?

1.5 Million fake deposit accounts, and around half a million fake credit card accounts. It's staggering.
OOooh, yippie-skip. $185 million on 2 million acts of fraud. Less than $100 per incident.

That's not even a tiny disincentive.

It's like telling a mugger he has to forfeit the lint in his pockets.

What say we add a couple zeros, huh? $18 billion. That might make BofA or Chase think twice before doing the exact same thing as a matter of policy.
 
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OOooh, yippie-skip. $185 million on 2 million acts of fraud. Less than $100 per incident.

That's not even a tiny disincentive.

It's like telling a mugger he has to forfeit the lint in his pockets.
A UNAX violation carries a 1000$ per incident fine. That's not opening an account fraudulently, that's simply looking at someone's tax information without valid justification.

So it would seem that a 2 Billion fine should be a minimum.
 

mb504

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