Wells Fargo scandal

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September 14th, 2016 at 4:22:19 PM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 106
Posts: 7758
Quote: reno
I'm wondering how all 5,300 employees learned to cheat using the same methods (fake email addresses, etc.) Coordinated conspiracy? Or just a coincidence that 5,300 bad apples were all doing the same thing, independent of each other.


5,000+ is an incredible amount of people to have "in on it." WFC has a pretty good reputation, we are not talking about some subprime mortgage house here. So lets take this apart.

It is next to impossible that so many employees would come up with such similar ideas and act on them. Channeling DeNiro in "Casino" it "CAN NOT HAPPEN, WOULD NOT HAPPEN!" Banks have systems in place to make sure that this kind of thing does not happen by accident. You would need to compromise lots of compliance people. This would take an effort by probably 2-3 people at a very high level.

Looking at the broader level, I feel many if not most of the 5,300 were dupes, patsies, and suckers who just went along. I know I have seen it happen. At a tax service I was told to just "add" an add-on warranty that brought the customer no real benefit We were told to do it even as a competitor was paying a fine to the feds for the very same practice! I ignored it as it was a low level job I took mostly to see if I wanted to buy a franchise. But you know the more someone needs the job the more they will do this kind of thing.

Lets see what happens. My guess is someone high up put in an order to "just open an account for them, it is a BENEFIT to the customer after all!" Then the grunts did as they were told since doing it meant a bonus and not doing it meant looking for another job.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
September 14th, 2016 at 9:19:15 PM permalink
reno
Member since: Oct 24, 2012
Threads: 55
Posts: 943
Quote: DRich
I guess you would be boycotting them if you just avoided all forms of banking and financing. I have one friend that has no bank accounts and lives an all cash existence in Las Vegas.


Does your friend drive? Does he have a car insurance policy in the state of Nevada? The majority of insurers in Nevada use credit scores to determine the price each individual pays for automobile policies. In most U.S. states, credit scores are used to determine car insurance premium prices, not safe driving history.

From the State of Nevada website: "Most insurers obtain your credit information by subscribing to either one or more of the three national credit bureaus – Equifax, Experian or Transunion."

This nonsense is illegal in California, Massachusetts, and Hawaii.
September 15th, 2016 at 2:03:52 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 106
Posts: 7758
Quote: reno
Does your friend drive? Does he have a car insurance policy in the state of Nevada? The majority of insurers in Nevada use credit scores to determine the price each individual pays for automobile policies. In most U.S. states, credit scores are used to determine car insurance premium prices, not safe driving history.

From the State of Nevada website: "Most insurers obtain your credit information by subscribing to either one or more of the three national credit bureaus – Equifax, Experian or Transunion."

This nonsense is illegal in California, Massachusetts, and Hawaii.


They do not use credit alone, they use a blend of credit and driving history.

It is not "nonsense." There is a very direct correlation between responsible credit and responsible driving, which is why they started the practice.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
September 15th, 2016 at 6:53:57 AM permalink
reno
Member since: Oct 24, 2012
Threads: 55
Posts: 943
Quote: AZDuffman
It is not "nonsense." There is a very direct correlation between responsible credit and responsible driving, which is why they started the practice.


If there's an error on your credit report, it will affect how much you pay for insurance premiums. For example, TransUnion was convinced that this guy had two felony firearms convictions (it was a case of mistaken identity.) It was extremely difficult to remove the error: a dozen phone calls, the handiwork of a county court clerk and six weeks to solve the problem.

Quote: Washington Post
The Federal Trade Commission’s last large-scale study of credit reports, published in 2012, found that 26 percent of the consumers it examined had at least one mistake in their files. And 5 percent had errors that could be devastating, potentially denying lines of credit to them and making things like auto insurance prohibitively expensive. “To have that error level, it’s akin to 5 percent of automobiles spontaneously accelerating and having an accident, or 5 percent of planes falling from the sky,” Wu says. “We wouldn’t accept that error rate in other areas.”


The quality control is low (26% for minor errors, 5% for major errors) because they have no incentive to spend money on more staff to correct mistakes. We aren't their customers, so they don't need to bend over backwards to please us. The banks & insurance companies are their customers.
September 15th, 2016 at 7:35:23 AM permalink
reno
Member since: Oct 24, 2012
Threads: 55
Posts: 943
Quote: AZDuffman
Banks have systems in place to make sure that this kind of thing does not happen by accident.


Exactly.

This LA Times article is remarkable-- story after story from employees and customers. They forged signatures, even used the banker's home address when they didn't know the customer's home address. And in one case they convinced a homeless woman to open 6 checking accounts. The article includes several on-the-record denials from executives and spokesmen who insist none of it is true.

The Los Angeles City Attorney alleges that the fake accounts were created between 2011 and 2015. Which is what makes the LA Times articles so devastating: it was published in 2013. They shamelessly continued this behavior even after they had been caught red-handed by the biggest newspaper in California. I'm not sure why they thought there would be no consequences.
September 15th, 2016 at 4:14:15 PM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 106
Posts: 7758
Quote: reno
If there's an error on your credit report, it will affect how much you pay for insurance premiums. For example, TransUnion was convinced that this guy had two felony firearms convictions (it was a case of mistaken identity.) It was extremely difficult to remove the error: a dozen phone calls, the handiwork of a county court clerk and six weeks to solve the problem.



The quality control is low (26% for minor errors, 5% for major errors) because they have no incentive to spend money on more staff to correct mistakes. We aren't their customers, so they don't need to bend over backwards to please us. The banks & insurance companies are their customers.


Still, better credit usually equals safer drivers.

Mistakes on credit reports are a tricky thing. There are errors to be sure. But people abuse the system for correcting them. Show me one person with a serious error and I will find 5 who are flooding the bureaus with disputes to game the system to make a major purchase.

This is not near as bad as it was 10 years ago, but people still place disputes. Then there is the kind of dispute. If an account goes to collections because you were unhappy with the service, should it be on the report? You didn't pay after all so the info is accurate.

One guy we turned down for a car loan way back had collections all over his report. His logic was his wife was a nurse so he asked the providers to just accept what his insurance paid, if they did good if not he refused to pay. He could dispute, is that fair to who loans him money?
The man who damns money has obtained it dishonorably; the man who respects it has earned it
September 28th, 2016 at 8:01:56 AM permalink
reno
Member since: Oct 24, 2012
Threads: 55
Posts: 943
The Wells Fargo board announced late Tuesday that it is forcing both CEO John Stumpf and former community banking head Carrie Tolstedt to forfeit more than $60 million in bonuses and unvested stock awards.

Quote: Forbes
According to a statement from the board, Stumpf will forfeit all of his outstanding unvested equity awards, which are valued at approximately $41 million based on Tuesday’s closing of $45.09 per share; he will forgo his salary during the investigation; and he will not receive a bonus for 2016. Carrie Tolstedt, the woman who used to be in charge of the unit that was responsible for creating the unauthorized accounts (she retired this summer), will also see clawbacks in her compensation: the board said that Tolstedt will forfeit all of her outstanding unvested equity awards, which are valued at $19 million based on Tuesday’s closing price; nor will she receive a bonus for 2016, be paid any severance or receive any “retirement enhancements in connection with her separation from the company.” The board also said that Tolstedt has agreed to not exercise her outstanding options during its investigation.
September 29th, 2016 at 9:10:09 PM permalink
reno
Member since: Oct 24, 2012
Threads: 55
Posts: 943
And now they've been busted for taking cars & trucks away from U.S. soldiers without notifying the servicemen.

Quote: Bloomberg
Wells Fargo, which doesn’t admit or deny the allegations, is accused of engaging in “a pattern of unlawful repossessions” from 2008 to 2015 in the DOJ settlement, which still needs approval in federal court in Los Angeles. In most cases, firms must obtain court orders before seizing vehicles from soldiers, sailors, airmen and Marines who are delinquent on their loans. The investigation started when the bank took back a Ford Escape from a soldier getting ready to deploy to Afghanistan.

The Justice Department got a complaint that Wells Fargo grabbed the Ford from an Army National Guard soldier in North Carolina, according to court records and the department’s statement. The bank shed the vehicle in an auction before demanding $10,000 in an unpaid balance from the soldier


Wells Fargo faces fines of $24 million for these illegal repossessions. Since opening the investigation, the Justice Department has discovered hundreds of similar cases dating back to 2008. The bank has been ordered to pay each of the affected service members $10,000, any lost equity in the vehicle with interest, and repair the credit score of each person.
September 29th, 2016 at 9:18:00 PM permalink
rxwine
Member since: Oct 24, 2012
Threads: 126
Posts: 6026
I thought I heard today they were involved in at least 3 different types of cases other than this one. Each of them are some kind of money grab and all ended up settling and paying fines. Or something like that.

Anyway, this current thing isn't just a lark, but they've engaged in several questionable or illegal practices it seems over the years.
No one has ever proven I am not God.
September 30th, 2016 at 2:10:00 AM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 106
Posts: 7758
Quote: reno
And now they've been busted for taking cars & trucks away from U.S. soldiers without notifying the servicemen.

Quote: Bloomberg
Wells Fargo, which doesn’t admit or deny the allegations, is accused of engaging in “a pattern of unlawful repossessions” from 2008 to 2015 in the DOJ settlement, which still needs approval in federal court in Los Angeles. In most cases, firms must obtain court orders before seizing vehicles from soldiers, sailors, airmen and Marines who are delinquent on their loans. The investigation started when the bank took back a Ford Escape from a soldier getting ready to deploy to Afghanistan.

The Justice Department got a complaint that Wells Fargo grabbed the Ford from an Army National Guard soldier in North Carolina, according to court records and the department’s statement. The bank shed the vehicle in an auction before demanding $10,000 in an unpaid balance from the soldier


Wells Fargo faces fines of $24 million for these illegal repossessions. Since opening the investigation, the Justice Department has discovered hundreds of similar cases dating back to 2008. The bank has been ordered to pay each of the affected service members $10,000, any lost equity in the vehicle with interest, and repair the credit score of each person.



I would want to see more on the Escape. "Getting ready to deploy" <> "Deployed." Speaking from experience, US Soldiers often have awful credit histories and generally have very poor financial management. When I would take an application and asked how much they made a month half the time they had to ask someone. I even had a Col or General who applied and had no idea then laughed about it when I told him what it should be, saying "If you say so!"

So I am not going to throw them totally under the bus here.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
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