Stress got so high that Landaverde said she developed sleep problems and a tic in her eye. Of Bank of America customers, 31 percent said they felt overly pressured for products they didn’t want or need. During the financial crisis, the bank trumpeted itself as conservative, in contrast to its rivals.
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NEW YORK (AP) It began with the constant and compulsive pressure to sell.
After a almost year long court battle, that public spat in court over the Wells Fargo rooftop signs near U.S. Bank Stadium is finally over.
Earlier this month, Wells Fargo settled with a Los Angeles prosecutor and with federal regulators who accused the bank of opening more than 2 million checking and credit accounts for customers, without the customers’ knowledge!
Employees at the bank known for its stagecoach logo say the vast pressure to sell, coming directly from top executives, spurred them to push products customers did not need nor want.
After the revelation of the scandal, once known to be most ‘valued bank’ faced severe criticism for setting unreasonable sales target and for allowing such prolonged unethical behavior. Arbitration applies even in cases when the account was opened without permission, according to previous lawsuits against the bank for the same practices.
Following the Wells Fargo incident, Thomas J. Curry, Comptroller of the Currency stated, “I have directed that we are to do a horizontal review so we will be looking specifically at sales practices at our largest banks and midsized banks”.
“I dread it every day”.
Under fire, Stumpf said he has told his managers to do “whatever it takes” to make customers whole, refunding fees or compensating them for damage to their credit ratings.
“You say no? Here are the transcripts of 12 quarterly earnings calls that you participated in from 2012 to 2014, the three full years in which we know this scam was going on. Let’s sign you up for a secured credit card”, said one Wells Fargo personal banker from a small town in Southern California, who spoke on condition of anonymity because the person still works for the company and fears retribution. Bankers in Minnesota, Pennsylvania and elsewhere described a sales culture where cheating the system was par the course.
Wells Fargo has acknowledged bank employees abused customers over five years and about 5,000 employees were fired in that time.
Stumpf said the Wells Fargo Board is actively engaged on this issue. To meet sales targets employees can book fake orders which are then subsequently “cancelled by customers”.
U.S. Sen. Elizabeth Warren (D-Mass.) has been getting a lot of notice for her tough questioning of Wells Fargo CEO John Stumpf, and that’s as it should be. However, at Wells Fargo, this was a standard business practice involving more than 1 in 20 employees supervised by Carrie Tolstedt.
Vilified for thrusting the blame for Wells Fargo’s illicit behavior onto low-level and low-earning employees, Stumpf seemed only to frustrate lawmakers from both sides of the aisle with his explanations.
The storied financial services firm of Wells Fargo just committed the broadest financial crime in American history.
Abuses were found as early as 2011, Stumpf said, but bank executives only realized the scale of the problem early previous year.
The bank’s board of directors is examining what action it should take against company executives, Stumpf told the committee. “And I want to apologize for not doing more sooner to address the causes of this unacceptable activity”. “I am deeply sorry that we have not lived up to our values in this way”.
Stumpf offered some detail at the hearing about who was sacked, saying “bankers, bank managers, managers of managers, and even an area president”.
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Ken Sweet covers banking and consumer financial affairs for The Associated Press.
