Did Wells Fargo charge you because of a fake account?

[swakyaby]

Had one experience with Wells Fargo one and a half years ago I thought was rather shady. I kept a high balance in one checking account (Portfolio Management Account, PMA), and a low balance in a 2nd checking account. They were both linked, so there were no fees.

But then Wells Fargo sent notice they were re-characterizing the checking accounts. They inexplicably designated the high balance account as a regular checking account, and the low balance account as the PMA account which is subject to low account balance monthly fees. When I saw a $30 service charge appear on one of my checking accounts, I called and said what is this for? The customer service explained I only had $1,000 in my newly designated PMA account, and it required a minimum $25,000 to avoid a $30 monthly service charge. I pointed out that my other checking account has over $80,000.00 in it, and I never requested these changes. The customer service gave up and agreed to credit my account the service charge as long as I transferred $24K into the other account.

I think by doing those shenanigans, Wells Fargo was generating lots of additional service charges on customers who actually had high balances like me. Hope that enough customers protested or closed their accounts so that they think twice before trying that again.

 

[Sunset]

WF is the industry leader in cross platform product sales. It's their pride and joy, and their largest shareholder (Mr. Buffet) has mentioned this as one reason he likes it so much. The branch personnel aren't harangued to sell - it's much worse - they have quotas, and not meeting quota is cause for job loss. This unavoidably leads to overselling. It would be no surprise to learn that some of those 5K were fired for not meeting quota.

We closed our account with WF after being charged for a service we neither wanted nor requested. When I complained they just kept sending me to speak with someone else in the branch, and on the phone, after numerous calls and escalations, they finally just said "tough luck" and hung up. I filed a complaint with the federal regulators, and it appears others did the same.

IMHO it is always a bad sign when a bank employee is more afraid of the branch manager than an irate customer.

Your case sounds like the type of situation that happened.
Perhaps you can get a refund for the fees

 

[candrew]

WF is the industry leader in cross platform product sales. It's their pride and joy, and their largest shareholder (Mr. Buffet) has mentioned this as one reason he likes it so much. The branch personnel aren't harangued to sell - it's much worse - they have quotas, and not meeting quota is cause for job loss. This unavoidably leads to overselling. It would be no surprise to learn that some of those 5K were fired for not meeting quota.

We closed our account with WF after being charged for a service we neither wanted nor requested. When I complained they just kept sending me to speak with someone else in the branch, and on the phone, after numerous calls and escalations, they finally just said "tough luck" and hung up. I filed a complaint with the federal regulators, and it appears others did the same.

IMHO it is always a bad sign when a bank employee is more afraid of the branch manager than an irate customer.

You are correct. Personnel weren't harangued but instead abused:

"Former employees tell CNNMoney that they felt incredible demands from managers to meet sales quotas. The same managers turned a blind eye when ethical and even legal lines were crossed.
"I had managers in my face yelling at me," Sabrina Bertrand, who worked as a licensed personal banker for Wells Fargo in Houston in 2013, told CNNMoney."

 

[ronin]

WF. Great company. Several years back I called around on refi rates and talked with them. Next day I went into the office and they tried to get me to sign pre-filled out contract that turned out to be for double the principle amount I wanted to borrow and at a rate a couple of percentage points higher than what was quoted the day before. Needless to say, I unload on them before exiting stage left. Won't be stepping into one of their offices again in this lifetime.

 

[meierlde]

One time I went to change a CD out at WF and the person kept pressing my for a debit card (which I did not want or need, since debit cards don't give the consumer protection that credit cards do). If you treat a credit card as a charge card (i.e. pay it off every month it works as good as a debit card)
As part of the disucssion the rep tried to tell me I needed it to cash a check at other branches, I told him that if WF would not take my check and passport as ID, I would have to find another bank. Eventually he let the conversation lapse. I guess now I understood why he did not want to take no for an answer. I do monitor the account daily and look at transactions and twice have had unexplained deposits appear, likley because someone wrote down an account number and did not use the preprinted form.
(This was over 10 years ago though).

 

[Running_Man]

Seriously though, how exactly would all this work? Assuming a WF employee created a phony account using an actual customer's personal info, how would that account have been funded? And wouldn't any fees that were generated by that fake account have triggered notices (emails, letters, calls, etc.) to the actual customer? Need to read more about this to fully understand it, I guess.

What I heard today was many was business accounts that were opened and when the new customer went to open the account for the businesses they added the paperwork for up to 9 additional accounts - credit cards - savings and by doing this would charge fees. Since many new businesses are busy and don’t unfortunately look at their statements the customer service gets sales of new accounts for their record and meets management goals.

 

[Texas Proud]

What I heard today was many was business accounts that were opened and when the new customer went to open the account for the businesses they added the paperwork for up to 9 additional accounts - credit cards - savings and by doing this would charge fees. Since many new businesses are busy and don’t unfortunately look at their statements the customer service gets sales of new accounts for their record and meets management goals.

Oh... this is where the big problems can be... a business account has one big number taken out... you pay for each check, deposit, if you have online access etc. etc.... LOTS of charges that someone has to look at the account analysis to see...

I would see fees tacked on that I would have to call up all the time to get reversed...

I remember once we were technically overdrawn during the day... so they charged an overdraft fee... but I had a deposit in before the day was up so it was during the day... now, we had a LOC with them, but they charged a HIGH fee that was 3X what the LOC would cost... they finally agreed that they should only charge the LOC fee.... even though I thought they should not charge us anything...

 

[Lsbcal]

Forget about being loyal as customers. Best to be nimble and opt for the best deals. We left WF years ago.

 

[Texas Proud]

Did anybody see any of the testimony from the CEO today

Man, did he look bad... Warren skewered him.... all he could say is 'the board...' over and over again.... would not even say his opinion... did not even think it was major fraud... no executive fired and no bonus money clawed back...


How can someone in his position be so tone deaf....


BTW, it seems the executive in charge of the unit where it happened retired and is walking away with between $90 and $125 million... and if she had been fired would have lost about $45 million....

 

[racy]

Email your senator: tell him/her to put the Wells Fargo CEO, John Stumpf in jail. Google the number of times that Wells Fargo has been fined for unethical and illegal practices. Obviously, fines have not changed their behavior. So, put the CEO in jail. Maybe that will get their attention. It makes me sick that these kind of practices go on and only minimally penalized.

 

[Helena]

.

Why did WF stock jump in price ?

Is someone priming it for a fall or buying while WF's blood is in the streets ??


" Shares of Wells Fargo & Co. WFC, +1.20% shot up 2.3% in morning trade Tuesday, after Morgan Stanley turned bullish, saying that the recently volatility has provided a buying opportunity. "

Wells Fargo's stock jumps after Morgan Stanley turns bullish - MarketWatch

.

 

[jazz4cash]

They only paid about 2-3 million in refunds to customers so even with the fines so far they are still way way ahead.


Sent from my iPhone using Early Retirement Forum

 

[Al in Ohio]

Email your senator: tell him/her to put the Wells Fargo CEO, John Stumpf in jail. Google the number of times that Wells Fargo has been fined for unethical and illegal practices. Obviously, fines have not changed their behavior. So, put the CEO in jail. Maybe that will get their attention. It makes me sick that these kind of practices go on and only minimally penalized.

+1. It won't stop until these high powered bank execs see serious jail time. What they do is far worse than armed robbery, but they have power, friends in high places, lobbyists and lawyers to isolate them from suffering the consequences of their actions. Laws need to be changed. Citizens United type rulings just made it worse.


Sent from my iPad using Early Retirement Forum

 

[Texas Proud]

+1. It won't stop until these high powered bank execs see serious jail time. What they do is far worse than armed robbery, but they have power, friends in high places, lobbyists and lawyers to isolate them from suffering the consequences of their actions. Laws need to be changed. Citizens United type rulings just made it worse.


Sent from my iPad using Early Retirement Forum

The big problem is trying to prove that they caused the fraud... or knew about it and did nothing... most laws require intent to put someone in jail... as I used to say to coworkers when one company I worked at went under 'it is not against the law to be stupid'.... (then again, one of the top execs was taking kickbacks and did go to jail)....

I would think that the lady exec that ran the retail unit that walked away with millions would be more liable than the CEO...

I also would like to see some go to jail.... but if you remember Enron, where they did much worse than here, it was difficult to prosecute... but, the did put a number of people in jail...

Now, if they can find a 'smoking gun' on one of the execs.... or flip a lower level manager, they might be able to do something... I just do not think the Justice Dept really cares....

 

[Texas Proud]

.

Why did WF stock jump in price ?

Is someone priming it for a fall or buying while WF's blood is in the streets ??


" Shares of Wells Fargo & Co. WFC, +1.20% shot up 2.3% in morning trade Tuesday, after Morgan Stanley turned bullish, saying that the recently volatility has provided a buying opportunity. "

Wells Fargo's stock jumps after Morgan Stanley turns bullish - MarketWatch

.

I saw some talking heads today and they were saying that they buy when 'blood is in the streets'.... they think that this is a minor issue and will go away and the bank is making big money and paying a high divi.... if they are right, then the stock will jump... if more bad news comes out, it can fall...

 

[frayne]

Why did this take so long to come into light ? I watched the CEO being grilled by Lizzy Warren yesterday and I can't say I disagree with anything she said. These things will only continue until these executives are held accountable, have to pay back their bonuses and are given hard time.

 

[Danmar]

The story doesn't sound complete. Employees created unauthorized accounts using your name and address. You would've received the paperwork and debit card or credit card the bank sent. If you didn't want them you would call the bank and close them. If you kept them open you would've received statements. How can you be charged overdraft fees if you never use them? Among all the unauthorized accounts, how many accounts generated how much fees the bank didn't reverse? I doubt the consumers affected actually paid much in fees.

Agree. Hard to see how WF could benefit from these phantom accounts? Clearly sounds like a case of poorly designed employee incentives. Question wil be who knew what and when. 5,300 people getting fired is remarkable. Will be interesting to see how high the "rot" goes. Let's hope other banks have reviewed their controls and this hasn't happened elsewhere. Inconceivable that senior people would knowingly endorse this practise. But who knows?

 

[Danmar]

The big problem is trying to prove that they caused the fraud... or knew about it and did nothing... most laws require intent to put someone in jail... as I used to say to coworkers when one company I worked at went under 'it is not against the law to be stupid'.... (then again, one of the top execs was taking kickbacks and did go to jail)....

I would think that the lady exec that ran the retail unit that walked away with millions would be more liable than the CEO...

I also would like to see some go to jail.... but if you remember Enron, where they did much worse than here, it was difficult to prosecute... but, the did put a number of people in jail...

Now, if they can find a 'smoking gun' on one of the execs.... or flip a lower level manager, they might be able to do something... I just do not think the Justice Dept really cares....

Agree. Except for the part about the JD not caring. Most politicians love to see execs go to jail. Especially bankers. I would think the CEO is toast.

 

[Sunset]

Employees that reported the bad/illegal things they were being asked/told to do to the Ethics hotline, were fired soon afterwards.
One even emailed the CEO directly to report the bad things, and of course the CEO claimed he couldn't remember it.

 

[Car-Guy]

Did anybody see any of the testimony from the CEO today

Man, did he look bad... Warren skewered him.....

Absolutely took him apart. Appears he got his hand caught in the cookie jar. Maybe that's why he had his right hand all bandaged up.

If this is "mostly" true, he (and maybe others) should be sent to jail and forfeit "some" of their net worth. Maybe he could share a cell with Bernie Madoff. Bernie has a lease that doesn't expire until 2139.

 

[Texas Proud]

Agree. Except for the part about the JD not caring. Most politicians love to see execs go to jail. Especially bankers. I would think the CEO is toast.

Since few (if any) went to jail over the 2008 financial disaster I do not see people going to jail over this...

 

[Texas Proud]

Why did this take so long to come into light ? I watched the CEO being grilled by Lizzy Warren yesterday and I can't say I disagree with anything she said. These things will only continue until these executives are held accountable, have to pay back their bonuses and are given hard time.

Yes, I have to agree that she was spot on... and I am not a fan of her...

I have not looked, but she must have been a prosecutor... how she would cut him off when he was going off line or making up some BS answer... how she would say "I take that as a no" when he would not answer a question...


I do not feel sorry for Wells.... and do hope somebody goes to jail... at a minimum lose a big part of their bonus...


BTW, I saw one guy on TV who said they had opened up 17 accounts in his name and was taking out money from his main account to fund them... I think it was over time, but still... how long does it take to say "I am outta here"...

 

[Danmar]

Since few (if any) went to jail over the 2008 financial disaster I do not see people going to jail over this...

Agree but nevertheless the desire to send them there is growing.

 

[MichaelB]

Agree but nevertheless the desire to send them there is growing.

Not so sure the desire to see bankers punished is increasing - but it is more determined. This unlawful activity seemed pretty widespread. The Bloomberg headline this morning caught my attention

Wells Fargo Sued Over Firings for Missed Account Quotas

Wells Fargo Sued Over Firings for Missed Account Quotas - Bloomberg

At this stage there is no way to know if that lawsuit has merit, but it seems (to me, at least) appropriate that this additional aspect of the wrongdoing also figure in the story. If employees were let go on a regular basis for not meeting quotas, it will be more difficult for the bank to show that this was not systemic and senior management not aware.

 

[John Galt III]

I have a 401K with Wells Fargo, and they added a blurb about the recent scandal, and the blurb has prevented my computer from accessing my account. Perfect.