Some extra story commentary about a business sector people love to hate. And sometimes, our feelings are fully justified.
Let’s start with the story, from True’s 16 June 2024 issue:
They Can’t Keep Secrets, They’re Tellers
Banking giant Wells Fargo & Co. filed a report with FINRA — the Financial Industry Regulatory Authority — to say it had fired more than 12 employees in May from its wealth- and investment-management unit “after review of allegations involving simulation of keyboard activity creating impression of active work.” The employees were apparently using software to show activity on their work computers. A company spokesman commented that “Wells Fargo holds employees to the highest standards and does not tolerate unethical behavior.” (RC/Bloomberg) …Oh? Since when?
Unfair?
Is the story (or really, its tagline) unfair to Wells Fargo? Well, let’s see. In 2009 it was found the bank’s home mortgage unit pushed “mud people” into “ghetto loans” (Black people into subprime loans), resulting in its paying $175 million in fines and restitution. In 2010 it admitted it ignored money laundering laws, which enabled drug traffickers to buy four airplanes that were used to ship 22 tons of cocaine to Mexico.
In 2010 Wells paid $203 million in fines and restitution for what a judge ruled were “profiteering” policies designed to “gouge” customers with misleading and excessive overdraft fees. In 2012 it paid a $5.4 billion fine for improper foreclosure practices. In 2016 the company agreed to pay $1.2 billion for giving government-guaranteed loans to people who didn’t qualify for them.
Also in 2016 the bank was fined $185 million for opening over 1.5 million checking and savings accounts, and 500,000 credit cards, on behalf of customers without their consent. (The head of the department that did it retired with a $124.6 million bonus package.) In 2020 it was determined the “staggering size, scope and duration” of the scandal was worse than first admitted, and the company was fined another $3 billion.
And there were many more scandals involving the bank during the same time period. When I turned 18, Wells issued me my first major credit card (I still remember the card number). I was proud to be part of the brand.
At various times I used them for my retirement accounts, my business payroll, my house construction and then its mortgage. It took awhile to get rid of all of that as scandal after scandal broke, and now that the last part, my mortgage, is gone, I will never be their customer again. It’s my belief that we definitely haven’t seen their last scandal, though I’m certainly not arguing other huge banks are a whole lot better.
Context
Really, this is such a tiny story in an ongoing march of huge problems with the bank. Though if some bank was going to have an issue, Wells is “the usual suspect.”
Oh, and what’s the slug (“They Can’t Keep Secrets, They’re Tellers”) about? A truism: when a big company has a culture where things are run in an underhanded way, it eventually comes to light — and if regulators do it right, the cost in fines is much more than the illicit profits. In the case of big banks, that means fines in the billions.
P.S.: Heard about Adobe yet? It’s right on theme.
Update, of Sorts
Sure enough, the same day I posted this, another Wells Fargo story came to my attention, and ended up in the next week’s newsletter:
Excuse Me — I Have a Question
“Even if you read this twice, we expect you to have questions,” the Martin County (Fla.) Sheriff’s Office said in an online post. A man apparently discovered that a Wells Fargo Bank branch in Hobe Sound was unlocked, so he popped across the street to a gas station to buy a mask, and then allegedly entered the bank at around 7:00 p.m. That set off an alarm, and the monitoring station alerted deputies there was a masked man inside looking in cabinets and drawers — but waited “at least an hour” to make the report. Naturally the intruder was gone by the time deputies arrived. Still, Colton Vanhonhenstien, 33, was arrested the next day. How did deputies link the intrusion to Vanhonhenstien, and how do they know about the trip to purchase a mask? The gas station’s security camera recorded his face, and purchase, clearly. The MCSO is investigating “Why the doors were unlocked, and why the alarm monitoring company called in an ‘in-progress robbery’ on a burglary that happened at a closed bank one hour prior.” (RC/WOFL Orlando) …What, they expect competence from Wells Fargo after they left the place unlocked?
Yep, people can make mistakes, and it’s not the first True story where a bank was left unlocked. (The one I found with a quick search was at …Wells Fargo.) It comes down to employees not following policy …or, perhaps, the policy makers not training employees well.
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P.S. Is that the same Adobe that would always install McAfee on your computer even if you didn’t ask for it?
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While McAfee Antivirus has a reputation for aggressively installing and upgrade pleas, I’m not aware of any association with Adobe. But then, I’ve never used one of those “name brand” anti-virii packages. -rc
They still do it, and it’s still garbage.
If you go to the Adobe Reader download site today, you will see “Included with your download: Install McAfee Security Scan Plus”.
I help a lot of older people with their computers, and many of them prefer Adobe Reader over the PDF viewer built into most modern web browsers. I always have to make sure to tell them to uncheck that box, and often then have to spend 5-10 minutes explaining why.
The problem with this story is that companies use “computer activity” as an indication of “work”, rather than actual work since it is easier than actually determining if the employee is working.
For example, if the employee is on the phone or doing other work which isn’t on the computer, the computer activity monitor will falsely claim that the employee isn’t working, so then the employee has to try to show that they were actually working.
Playing games, web surfing, etc. will falsely show the employee is working as well.
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That’s not a problem with the story, it’s a great explanation of the problem with Wells Fargo’s actions. 🙂 -rc
I stopped wanting to have anything to do with Wells Fargo when they fired my wife a week after she told her boss she was pregnant with our first child.
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Which, depending on when it happened, was probably illegal. But even if not illegal at the time, it’s an indication how far back their unethical behavior goes. -rc
Randy, you misunderstand. They hold employees to highest standards, not executives. I’ve always found it fascinating that executives are not held to the same standards as employees. The “leaders”, who are supposed to set the example of workplace behavior, can get away with misdeeds that get the “followers” fired. Odd world we are living in (but then you know that).
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Indeed. And that’s just what I’m criticizing here. Ethical standards flow down from the top. -rc
Yeah, also but more importantly, it’s the _target_ of the fraud that matters more than the deed itself. As long as it’s not the bank, hey, kudos to that man.
Wish I could upvote this comment. That’s exactly the point I was going to make.
Unfortunately, it’s not limited to the business world. You remember the same thing happened years ago regarding Abu Ghraib. The brasses that gave the orders were never charged, it was only the lowly soldiers carrying out the orders that ever saw a court-martial.
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Sure enough, I ranted about Abu Ghraib 20+ years ago too. -rc
Years ago I had an account at a locally owned bank. That bank was bought by Wells Fargo and customer service went downhill. I opened an account at a credit union and told Wells Fargo to close my account. Months later I realized they hadn’t closed it and I had to go down in person and “speak” to them. I will never do business with Wells Fargo again.
I suspect that forgetting to lock the door happens more often than the banks care to admit. Part of the Bank Protection Act of 1968 (12 U.S.C. 1882 and 12 CFR 208.61(c)(1)(i)) is that banks must have procedures for opening and closing the location each day.
Many banks use software to track the performance of these tasks. One feature that is available in some software packages is that the employee(s) doing the opening/closing procedure must check off every task of the opening/closing procedure as it is done. Another feature is the ability to automatically notify management if the closing tasks for the day have not been completed in a timely fashion, such as within 15 minutes of the expected closing time, at which time management *should* contact the responsible employee(s) and ask what is going on. (Full disclosure: I work as a software developer for one such banking software product.)
I suspect that if the regulators cared to ask for the records (assuming Wells Fargo even keeps electronic records), they would find many such cases.
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Thanks for your insider info. It did occur to me that forgetting to lock up is probably more common than supposed, if for no other reason than in most cases, it’s likely no one tries opening the front door in the off hours simply because they assume it IS locked. -rc
Why they don‘t have timers on their outer doors like we have in Switzerland?
Even my office doors at a normal company do this.
I once had a mortgage with Wells Fargo. Back when mortgage interest rates were dropping, I approached Wells Fargo, noted that I had been a loyal customer for many years, and asked what kind of rate I could get in a refinance. After much back and forth, they basically said they couldn’t do a thing for me and they would NOT refinance my loan to a lower rate. I then went out to a local mortgage company, and with no trouble whatsoever, refinanced to a considerably lower rate. Within less than one month after the refinance, my mortgage was bought out — by Wells Fargo.
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The one thing I did like about my Wells mortgage was they rarely sell mortgages they hold. I had no trouble doing several refis with them, ending with 3 percent. -rc
A long time ago we had a business account with WF. When we went to open a line of credit for the business we had to go through all of the many, many gyrations to do so. In that time frame we got a “pre-approved credit card” letter from them (I think for about $50k). A week or so after we received that we heard back from the banker about their offer for the LOC – $20k. We were actually insulted by that amount. We pointed out that another arm of the company apparently had no problem offering us more than twice that, so called “pre-approved”, for a credit card — but they wouldn’t budge.
We then went to a local business-oriented bank to apply for the same thing there. Result: 1/3 of the paperwork, 1 week to a decision, and a $100k line of credit. Needless to say we immediately moved all our accounts to that bank, where the relationship lasted 10+ years until I sold the company.
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When I was in my “sever everything Wells Fargo” phase, I also moved my business accounts to a small, local, bank. No monthly (or per-item) fees, and they give me a (little bit of!) interest on my savings (no interest from Wells). I have workable online banking too. I’ve never needed a LOC, but I suspect I could get one if I really wanted. It’s a lesson that I’ve learned twice: small banks can be a good friend to small businesses! -rc