Guest Post by Karl Denninger
So let me see if I get this right.
Wells Fargo put in place an extremely aggressive “cross-selling” requirement for their associates — basically, to keep your job and advance you were required to sell customers new products, which means that as an associate you had to be openly pushy to the point of hostility in order to keep your job.
Employees found this, obviously, to not work so well. You see, there’s a point at which pestering customers who come into your bank to cash a check or similar in an attempt to sell them something else, whether it be a credit card account or some other financial product, get very tired of this crap and instead of transacting the business they intended they pull all their money out and close their accounts instead, going next door to the otherbank (and there always is one.)
So to combat that problem these employees — 5,300 of them — committed open, outrageous and I might mention illegal acts. They signed up customers for “new services and fees”, in some cases transferring money into accounts they had never requested or opened.
Now let’s think about this for a minute. If you have money in some place and it is moved without consent that is both fraud and theft. If you are charged money for something you never requested or ordered, and the funds are taken, that too is fraud and theft.
Wells says 5,300 people were fired for this. However, Wells Fargo management was not prosecuted despite their policies being the reason the acts occurred, their willful lack of supervision being responsible for it going on for any length of time, their willful failure to check with customers on the their satisfaction with all these “new products” — or their intentional concealment of knowledge that they were never ordered in the first place was the reason this went on for as long as it did and once again because Wells is a “big company” all we see is fines.
If I stole 1/100th of the money involved in this I’d be rotting in a prison cell right now — and I should be. This scam resulted in millions of unauthorized accounts being created — not a few, not a few thousand, but millions.
Just in deposit accounts alone (which generate fees) 1.5 million such fake accounts were apparently created and funds moved into them. This then often resulted in the original account generating overdraft fees and returned checks not because the customer actually overdrew the account but because the bank stole the damn money and thus generated a bounced-check or overdraft charge when they generated the overdraft by moving the customer’s funds without their knowledge or consent!
This is black-letter bank fraud folks, and its a crime.
Since it is a financial crime, there were literally thousands of people involved in it and it was a systemic, intentional set of acts it facially appears to meet the definition of Racketeering.
Wells says it will pay “full restitution” to victims. Horse****. Bounced check charges and other adverse financial events such as this wreck your credit report. That in turn results in higher costs for auto and homeowners insurance, it can result in you being turned down for a home loan or being offered higher rates of interest for any money you borrow and it can even cost you a job.
This didn’t happen a few times folks, it appears it happened upwards of 2 million times between deposit and credit accounts, which means there are a real crap-ton of actual victims who were actually robbed and took actual damages.
$5 million in customer refunds? That’s a joke.
Go screw yourself, CFPB and — I might add — the rest of the so-called “regulators” and law enforcement in this country. If you cannot be bothered to indict the executives and employees involved this sort of crap then you are nothing other than a band of criminal thugs who exist for the explicit purpose of protecting, using the force of arms, criminal behavior by those who steal from everyone in this nation — just as you protect the drug companies and hospitals.
Maybe you can explain why it’s illegal to rob a bank and you will go to prison for stealing as little as $1 from it but when the bank robs you two million times exactly nobody is indicted or locked up.
Good luck.
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