Wells Fargo Fires 5,300 Employees for Opening Millions of Phony Accounts

[nuckin_futz]

Wells Fargo Fires 5,300 Employees for Opening Millions of Phony Accounts

The bank was also fined a record $185 million because of “the severity of these violations.”

September 8, 2016 5:28 pm

 

Wells Fargo is paying up and laying off thousands of workers after it reached an agreement to settle allegations that, for years, its employees extracted millions in fees by regularly opening new accounts for customers without their knowledge, according to the Consumer Financial Protection Bureau.

 

Under the agreement, announced Thursday by the C.F.P.B., Wells Fargo will pay a total of $185 million: a $100 million fine to the C.F.P.B.’s Civil Penalty Fund, $35 million the Office of the Comptroller of the Currency, and an additional $50 million to the City and County of Los Angeles. Richard Cordray, the bureau’s director, called it the “largest penalty the C.F.P.B. has ever imposed” because of “the severity of these violations.”

 

Federal regulators say that scheme, which allegedly began in 2011, involved Wells Fargo employees secretly creating millions of potentially unauthorized credit-card and bank accounts. Incentivized by rigorous sales quotas and compensation, employees transferred money from existing customer accounts to surreptitiously opened new accounts, the C.F.P.B. explained in its statement. Unaware that their balances had changed, customers were then charged overdraft fees or penalties for insufficient funds.

 

Over the course of five years, the C.F.P.B. said that employees opened about 1.5 million deposit accounts that customers may not have authorized, and applied for roughly 565,000 credit-card accounts under the same conditions. Regulators said employees went as far as creating fake e-mail addresses and PINs in order to pull it off.

 

Wells Fargo will also pay $5 million in customer remediation, the bank confirmed in a statement. “We regret and take responsibility for any instances where customers may have received a product that they did not request,” the statement said. The bank also confirmed that it is laying off 5,300 employees as a result, according to CNNMoney. In a memo sent to employees, Wells Fargo said, “when we make mistakes, we are open about it, we take responsibility, and we take action.”

 

The C.F.P.B. did not elaborate on how it uncovered the violations, but its director said the penalty “should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

 

http://www.vanityfair.com/news/2016/09/wells-fargo-fine

 

********************

 

I'm a little surprised this story got so little attention given the massive scale of the fraud and the number of  employees canned. Creating fake accounts is one thing but creating fake emails addresses and PIN's is taking it to another level.

 

As per usual no one will be going to jail. Despite wholesale fraud and theft having been committed. In fact the person in charge gets to skate with a massive payday. 

 

Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million

Wells Fargo & Co’s “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.

 

In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.

 

On Thursday, Wells Fargo agreed to pay $185 million, including the largest penalty ever imposed by the Consumer Financial Protection Bureau, to settle claims that that it defrauded its customers. The bank’s shareholders will ultimately have to swallow the cost of that settlement. The bank also said it had fired 5,300 employees over five years related to the bad behavior.

Tolstedt, however, is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.”

 

On Thursday, Richard Cordray, the head of the CFPB, had a different take, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law,” said Cordray. “They are a violation of trust and an abuse of trust.”

 

A spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.

 

http://fortune.com/2016/09/12/wells-fargo-cfpb-carrie-tolstedt/

 

Business as usual in the world of banking.

[Alflives]

3 minutes ago, nuckin_futz said:

Wells Fargo Fires 5,300 Employees for Opening Millions of Phony Accounts

The bank was also fined a record $185 million because of “the severity of these violations.”

September 8, 2016 5:28 pm

 

Wells Fargo is paying up and laying off thousands of workers after it reached an agreement to settle allegations that, for years, its employees extracted millions in fees by regularly opening new accounts for customers without their knowledge, according to the Consumer Financial Protection Bureau.

 

Under the agreement, announced Thursday by the C.F.P.B., Wells Fargo will pay a total of $185 million: a $100 million fine to the C.F.P.B.’s Civil Penalty Fund, $35 million the Office of the Comptroller of the Currency, and an additional $50 million to the City and County of Los Angeles. Richard Cordray, the bureau’s director, called it the “largest penalty the C.F.P.B. has ever imposed” because of “the severity of these violations.”

 

Federal regulators say that scheme, which allegedly began in 2011, involved Wells Fargo employees secretly creating millions of potentially unauthorized credit-card and bank accounts. Incentivized by rigorous sales quotas and compensation, employees transferred money from existing customer accounts to surreptitiously opened new accounts, the C.F.P.B. explained in its statement. Unaware that their balances had changed, customers were then charged overdraft fees or penalties for insufficient funds.

 

Over the course of five years, the C.F.P.B. said that employees opened about 1.5 million deposit accounts that customers may not have authorized, and applied for roughly 565,000 credit-card accounts under the same conditions. Regulators said employees went as far as creating fake e-mail addresses and PINs in order to pull it off.

 

Wells Fargo will also pay $5 million in customer remediation, the bank confirmed in a statement. “We regret and take responsibility for any instances where customers may have received a product that they did not request,” the statement said. The bank also confirmed that it is laying off 5,300 employees as a result, according to CNNMoney. In a memo sent to employees, Wells Fargo said, “when we make mistakes, we are open about it, we take responsibility, and we take action.”

 

The C.F.P.B. did not elaborate on how it uncovered the violations, but its director said the penalty “should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

 

http://www.vanityfair.com/news/2016/09/wells-fargo-fine

 

********************

 

I'm a little surprised this story got so little attention given the massive scale of the fraud and the number of  employees canned. Creating fake accounts is one thing but creating fake emails addresses and PIN's is taking it to another level.

 

As per usual no one will be going to jail. Despite wholesale fraud and theft having been committed. In fact the person in charge gets to skate with a massive payday. 

 

Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million

Wells Fargo & Co’s “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.

 

In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.

 

On Thursday, Wells Fargo agreed to pay $185 million, including the largest penalty ever imposed by the Consumer Financial Protection Bureau, to settle claims that that it defrauded its customers. The bank’s shareholders will ultimately have to swallow the cost of that settlement. The bank also said it had fired 5,300 employees over five years related to the bad behavior.

Tolstedt, however, is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.”

 

On Thursday, Richard Cordray, the head of the CFPB, had a different take, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law,” said Cordray. “They are a violation of trust and an abuse of trust.”

 

A spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.

 

http://fortune.com/2016/09/12/wells-fargo-cfpb-carrie-tolstedt/

 

Business as usual in the world of banking.

What a friggin joke.  This bank steals millions, and the little people lose their jobs to cover the bank's penalties, while the ones in management responsible for the scheme don't even go to prison (for a good and fashioned reeming) but get millions in salary/severance?  

[Lillooet_Hillbilly]

people that sell boot leg dvd's and cd's get huge fines and possible jail...............but If i steal millions wearing a shirt and tie I get a bonus?

[Green Building]

Upcoming class action lawsuit? 5300 turn on 1.

 

 

[nuckin_futz]

7 minutes ago, Alflives said:

What a friggin joke.  This bank steals millions, and the little people lose their jobs to cover the bank's penalties, while the ones in management responsible for the scheme don't even go to prison (for a good and fashioned reeming) but get millions in salary/severance?  

 

1 minute ago, Lillooet_Hillbilly said:

people that sell boot leg dvd's and cd's get huge fines and possible jail...............but If i steal millions wearing a shirt and tie I get a bonus?

 

[Green Building]

1 minute ago, Lillooet_Hillbilly said:

people that sell boot leg dvd's and cd's get huge fines and possible jail...............but If i steal millions wearing a shirt and tie I get a bonus?

Not quite. In addition to covering your tracks you must employ people to steal on your behalf in order to be eligible for said bonus. 

[Lillooet_Hillbilly]

1 minute ago, Green Building said:

Not quite. In addition to covering your tracks you must employ people to steal on your behalf in order to be eligible for said bonus. 

isn't that the definition of the Mafia?

[Green Building]

19 minutes ago, Lillooet_Hillbilly said:

isn't that the definition of the Mafia?

Yeah, but if you turn on your banking Don you don't get murdered you just pin the tail on the donkey.

[Fantomex]

Banks can't be trusted... Who knew?! 

[luckylager]

The banking system is corrupt, always has been. White collar criminals who actually believe that making millions of dollars by risking other people's money is legit deserve my foot in their ass.

 

Anyone who makes money off other people's money is a crook, plain and simple.

 

If they uncover something like that in Canada, I hope we go all Iceland on them, throw em in the slammer and seize their assets.

 

Bankers, Lawyers, Politicians and Real Estate Agents... scum. (except Rod, of course)

[chon derry]

a man with a brief case can steal more money than a man with a gun.... don henley.

[Alflives]

8 minutes ago, luckylager said:

The banking system is corrupt, always has been. White collar criminals who actually believe that making millions of dollars by risking other people's money is legit deserve my foot in their ass.

 

Anyone who makes money off other people's money is a crook, plain and simple.

 

If they uncover something like that in Canada, I hope we go all Iceland on them, throw em in the slammer and seize their assets.

 

Bankers, Lawyers, Politicians and Real Estate Agents... scum. (except Rod, of course)

And Harvey Spector.  He's one of "them types/ those people" too.  He's a good joe (Harvey) 

[luckylager]

2 minutes ago, Alflives said:

And Harvey Spector.  He's one of "them types/ those people" too.  He's a good joe (Harvey) 

Wanna know what I do to sympathisers, Alf? 

 

I cut off their f#$%ing noses.

[chon derry]

13 minutes ago, luckylager said:

The banking system is corrupt, always has been. White collar criminals who actually believe that making millions of dollars by risking other people's money is legit deserve my foot in their ass.

 

Anyone who makes money off other people's money is a crook, plain and simple.

 

If they uncover something like that in Canada, I hope we go all Iceland on them, throw em in the slammer and seize their assets.

 

Bankers, Lawyers, Politicians and Real Estate Agents... scum. (except Rod, of course)

throw in the reverse mortgage scums as well, their down in the bottom of the barrel as well.

[Alflives]

Just now, luckylager said:

Wanna know what I do to sympathisers, Alf? 

 

I cut off their f#$%ing noses.

 

Could be worse.  Rather my nose than...

[luckylager]

2 minutes ago, chon derry said:

throw in the reverse mortgage scums as well, their down in the bottom of the barrel as well.

Oh ya, they're "bankers"...loosely. 

[chon derry]

10 minutes ago, luckylager said:

Oh ya, they're "bankers"...loosely. 

my aunt in seattle signed up for this "boeing air" get your house renovated deals , little did she know she signed her house away , so my cousins found out for her ,since she didn't really know about the small print ,she thought she'd surprise everyone with the renovation , so the house that they had for 50 years was lost for a 45k job ,they knew she didn't intirly understand , but never bothered to explain anything further.

[Ghostsof1915]

This is the reason why when you hear people scream for de-regulation, don't be surprised at what happens afterwords. 

"It's good for business." Not for the consumer. 

Our parents and grandparents demanded laws for consumer protection. Now corporations will steam roller you to get higher profits.

It's like the robber barons of the 1800's have returned.

 

So much for the joke of "business ethics" they taught us in college in the 90's. 

[Alflives]

2 minutes ago, Ghostsof1915 said:

This is the reason why when you hear people scream for de-regulation, don't be surprised at what happens afterwords. 

"It's good for business." Not for the consumer. 

Our parents and grandparents demanded laws for consumer protection. Now corporations will steam roller you to get higher profits.

It's like the robber barons of the 1800's have returned.

 

So much for the joke of "business ethics" they taught us in college in the 90's. 

There are a great many sociopaths in management of these types of corporations.  

[Tortorella's Rant]

As Carlin said, I think: Money rules this &^@#ing world.

It pays to be rich. And a rich criminal at that too.