George M. Doolittle, EVP Head of GFI Payment Services, at Wells Fargo, said: “SIB is particularly dedicated to ensuring that our partnership is based on a commitment to straight-through processing”.
Advertisement
According to regulators, thousands of Wells Fargo employees were allegedly involved in a widespread scheme to reach aggressive sales goals – and earn bonuses – by creating 2 million accounts, including credit cards, customers didn’t authorize.
“There are two possibilities: Customer abuse was part of business model, in which case lots of high ranking people need to go to prison”, said Bart Naylor, a financial policy advocate for Public Citizen.
(WFC) announced after the close Monday that it has instructed workers in US call centers to temporarily halt cross-selling of financial products to customers, shortly after federal regulators fined the bank for opening more than 2 million unauthorized accounts, according to reports.
Shrewsberry said the bank had invested $50 million to improve its monitoring of employees’ activities, including adding a “mystery shopper program” to identify improper sales tactics.
Wells Fargo spokeswoman Richele Messick told the Observer on Tuesday the company is “working through the details” of how bankers will be paid once the bank abandons sales goals.
The phantom accounts meant that some customers were charged for insufficient funds, according to the regulators.
“This ought to be a moment when people stop and remember how risky the system is when you don’t have the proper protections in place”, Lew said at the Delivering Alpha conference, hosted by CNBC and Institutional Investor magazine. “It should remind all of us and firms that culture and compensation make a difference”, he said.
Wells Fargo lost more than $9 billion of its market capitalization to $236 billion; whereas, JPMorgan became the most valuable bank with $240 billion in market capitalization.
The behavior was first brought to light by an investigation by The Los Angeles Times in 2013. “If they did this, would they have opened other accounts for bad actors, whether it’s drug dealers, money launderers and others?” he asked.
A federal agency used her Wells Fargo unit as a cautionary tale, imposing the largest fine it’s ever levied.
“We deeply regret any situation where a customer got a product they didn’t request”, Stumpf said. The practice has been cited as a key factor leading to the unwanted customer accounts. But the bank says it hasn’t fully figured out how it will compensate bankers in its branches and call centers once it makes the change.
“Our objective has always been and continues to be to meet our customers’ financial needs and drive customer satisfaction”, said CEO John Stumpf.
The US Senate Banking Committee has called a hearing to investigate the bank.
Messick said Wells Fargo plans to consult with employees and an independent consultant to determine how compensation should be structured.
Advertisement
Shares of Wells Fargo closed down 3.26 percent to $46.96 on Tuesday, and were off 5.6 percent since the announcement of the settlement agreement last week.
