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Wells Fargo's stupid scam ...
Topic Started: Sep 10 2016, 03:08 AM (643 Views)
Axtremus
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HOLY CARP!!!
[CPFB] Busts Giant Bank Scam
http://www.huffingtonpost.com/entry/wells-fargo-fraud_us_57d2d237e4b03d2d459a083c

Quote:
 
Over at least the past five years, Wells Fargo employees created more than 1.5 million sham checking accounts and applied for 565,000 credit cards, using customer names and money. Customers were charged unnecessary fees, saw their credit scores fall or were simply confused when debit and credit cards they never asked for showed up in the mail.
...
Though it’s obviously a huge blow to the bank’s reputation, the Wells Fargo fraud wasn’t even that profitable ― scamming thousands and thousands of customers out of a total of $2.6 million in surprise fees over five years doesn’t provide much financial boost to a bank that made $86.1 billion in revenue and $22.9 billion in profit last year alone.
Being unethical and illegal aside, the whole thing just screams STUPID!
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George K
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Finally
This is Volkswagen stupid.
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Mikhailoh
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If you want trouble, find yourself a redhead
Worse. VW had strong motivation.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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jon-nyc
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Cheers
Repeating what I said next door:


This is a category error. 'The bank' didn't do this, individual employees did. I mean, that's always true in some sense but here what I mean is nobody decided to do this because it would be good for the bank. Individual employees defrauded the customers and the bank by creating sham accounts to hit their bonus quotas.

I'm not saying the bank doesn't bear the ultimate responsibility, of course it does. But it a very real sense it was also a victim of fraud. Again, maybe they should have had better controls or less aggressive quotas or both, but calling the bank stupid for doing this doesn't capture the agency and intentionality involved.
In my defense, I was left unsupervised.
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George K
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Finally
Jon, do you think that 5,000 employees "just came up with" this plan? I'd suspect that there was a bit of a "nudge nudge, wink wink" guidance from management.
A guide to GKSR: Click

"Now look here, you Baltic gas passer... "
- Mik, 6/14/08


Nothing is as effective as homeopathy.

I'd rather listen to an hour of Abba than an hour of The Beatles.
- Klaus, 4/29/18
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Luke's Dad
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George K
Sep 10 2016, 04:59 AM
Jon, do you think that 5,000 employees "just came up with" this plan? I'd suspect that there was a bit of a "nudge nudge, wink wink" guidance from management.
More likely a couple employees that worked their way up the ranks taught it to those below them as it still helped them continue to move up the ranks.

I imagine that there's jail time ahead for some of these guys?
The problem with having an open mind is that people keep trying to put things in it.
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Steve Miller
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Bull-Carp
Luke's Dad
Sep 10 2016, 05:28 AM
I imagine that there's jail time ahead for some of these guys?
:spit: :spit: :spit:
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jon-nyc
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George K
Sep 10 2016, 04:59 AM
Jon, do you think that 5,000 employees "just came up with" this plan? I'd suspect that there was a bit of a "nudge nudge, wink wink" guidance from management.
I don't think so, precisely because of what Ax says - it's stupid. The vast majority were 'no fee' accounts. The employees opened them with the hope that the customer would never even notice. People don't use accounts they don't know they have.

Also think of the scale here. They have over 6000 branches. Scores of tellers/customer service people in each who are incentivized through carrot and stick to open a certain number of new accounts each month. (not to mention centralized call centers) The idea that a whole bunch would independently figure out how to game it (or be told how by another employee) is not surprising to me.
In my defense, I was left unsupervised.
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jon-nyc
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Luke's Dad
Sep 10 2016, 05:28 AM
I imagine that there's jail time ahead for some of these guys?
I doubt any of the authorities involved are interested in prosecuting bank tellers.

What's more likely is to see more jurisdictions pile on Wells Fargo for negotiated settlements. Why should Los Angeles have an exclusive? They have branches in lots and lots of states.
In my defense, I was left unsupervised.
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jon-nyc
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Matt Levin's take:

Quote:
 
Two basic principles of management, and regulation, and life, are:

- You get what you measure.
- The thing that you measure will get gamed.

Really that's just one principle: You get what you measure, but only exactly what you measure. There's no guarantee that you'll get the more general good thing that you thought you were approximately measuring. If you want hard workers and measure hours worked, you'll get a lot of workers surfing the internet until midnight. If you want low banking bonuses and measure bonus-to-base-salary ratios, you'll get high base salaries. Measurement is sort of an evil genie: It grants your wishes, but it takes them just a bit too literally.


https://www.bloomberg.com/view/articles/2016-09-09/wells-fargo-opened-a-couple-million-fake-accounts

In my defense, I was left unsupervised.
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Horace
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jon-nyc
Sep 10 2016, 04:43 AM
Repeating what I said next door:


This is a category error. 'The bank' didn't do this, individual employees did. I mean, that's always true in some sense but here what I mean is nobody decided to do this because it would be good for the bank. Individual employees defrauded the customers and the bank by creating sham accounts to hit their bonus quotas.

I'm not saying the bank doesn't bear the ultimate responsibility, of course it does. But it a very real sense it was also a victim of fraud. Again, maybe they should have had better controls or less aggressive quotas or both, but calling the bank stupid for doing this doesn't capture the agency and intentionality involved.
A scam that benefited "the bank" rather than "individual employees" would seem an oddly altruistic scam.
As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good?
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TomK
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Horace
Sep 10 2016, 09:47 AM
jon-nyc
Sep 10 2016, 04:43 AM
Repeating what I said next door:


This is a category error. 'The bank' didn't do this, individual employees did. I mean, that's always true in some sense but here what I mean is nobody decided to do this because it would be good for the bank. Individual employees defrauded the customers and the bank by creating sham accounts to hit their bonus quotas.

I'm not saying the bank doesn't bear the ultimate responsibility, of course it does. But it a very real sense it was also a victim of fraud. Again, maybe they should have had better controls or less aggressive quotas or both, but calling the bank stupid for doing this doesn't capture the agency and intentionality involved.
A scam that benefited "the bank" rather than "individual employees" would seem an oddly altruistic scam.
Except the scam didn't benefit the bank--it actually cost the bank money. This was a way for low level bank employees to keep their crappy jobs for one more day. Now 5000+ employees all didn't come up with this plan individually, I'm sure one guy told the other guy how it was done. That being said--it was only a matter of time before someone found out and they were caught.

What is interesting is that the bank higher ups never figured out this was going on. Along the way I think it was highly improbable that the 5000 low levels never mentioned it to the higher ups. Management must have known. At least middle management.

But then while this makes the WF management look stupid they made almost $23 billion profit on $86 billion in revenue--that's a pretty good chunk of change. I don't think any top managers are getting fired over this one.

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jon-nyc
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Horace
Sep 10 2016, 09:47 AM
A scam that benefited "the bank" rather than "individual employees" would seem an oddly altruistic scam.
No, it's just that most bank malfeasance benefits the employees and the bank. (Until they get caught, anyway). The employees do something bad but profitable and the bank earns money and the employees get a big bonus.

That's not what's going on here.
In my defense, I was left unsupervised.
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jon-nyc
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(Just realized tom made the same point)
In my defense, I was left unsupervised.
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TomK
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jon-nyc
Sep 10 2016, 10:49 AM
(Just realized tom made the same point)
But it took me three paragraphs and only took you one sentence. :D
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Horace
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HOLY CARP!!!
TomK
Sep 10 2016, 10:05 AM
Horace
Sep 10 2016, 09:47 AM
jon-nyc
Sep 10 2016, 04:43 AM
Repeating what I said next door:


This is a category error. 'The bank' didn't do this, individual employees did. I mean, that's always true in some sense but here what I mean is nobody decided to do this because it would be good for the bank. Individual employees defrauded the customers and the bank by creating sham accounts to hit their bonus quotas.

I'm not saying the bank doesn't bear the ultimate responsibility, of course it does. But it a very real sense it was also a victim of fraud. Again, maybe they should have had better controls or less aggressive quotas or both, but calling the bank stupid for doing this doesn't capture the agency and intentionality involved.
A scam that benefited "the bank" rather than "individual employees" would seem an oddly altruistic scam.
Except the scam didn't benefit the bank--it actually cost the bank money. This was a way for low level bank employees to keep their crappy jobs for one more day. Now 5000+ employees all didn't come up with this plan individually, I'm sure one guy told the other guy how it was done. That being said--it was only a matter of time before someone found out and they were caught.

What is interesting is that the bank higher ups never figured out this was going on. Along the way I think it was highly improbable that the 5000 low levels never mentioned it to the higher ups. Management must have known. At least middle management.

But then while this makes the WF management look stupid they made almost $23 billion profit on $86 billion in revenue--that's a pretty good chunk of change. I don't think any top managers are getting fired over this one.

A bank's employees used their power as bank employees to rip people off, for their own enrichment.

I don't think there's any importance to the question of whether the scam enriched "the bank".
As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good?
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jon-nyc
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Actually the vast majority - over 95% - of scam accounts didn't even have fees associated with them. For the most part the employees tried not to affect the customer at all. They didn't want the customer to notice.

They were scamming their employer.
In my defense, I was left unsupervised.
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TomK
HOLY CARP!!!
jon-nyc
Sep 10 2016, 02:07 PM
Actually the vast majority - over 95% - of scam accounts didn't even have fees associated with them. For the most part the employees tried not to affect the customer at all. They didn't want the customer to notice.

They were scamming their employer.
Just keeping their jobs. Doing what they need to do to pay the mortgage. There is a really sad story here and it's not about scamming.
Edited by TomK, Sep 10 2016, 02:16 PM.
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Horace
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HOLY CARP!!!
jon-nyc
Sep 10 2016, 02:07 PM
Actually the vast majority - over 95% - of scam accounts didn't even have fees associated with them. For the most part the employees tried not to affect the customer at all. They didn't want the customer to notice.

They were scamming their employer.
Any new credit card affects your credit score and opens up identity theft possibilities etc. And then there were the 5% which apparently did have fees.
As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good?
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Horace
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HOLY CARP!!!
TomK
Sep 10 2016, 02:15 PM
jon-nyc
Sep 10 2016, 02:07 PM
Actually the vast majority - over 95% - of scam accounts didn't even have fees associated with them. For the most part the employees tried not to affect the customer at all. They didn't want the customer to notice.

They were scamming their employer.
Just keeping their jobs. Doing what they need to do to pay the mortgage. There is a really sad story here and it's not about scamming.
Actually, yes, it is about scamming.

And about disproportionate opportunities available to those who work directly with money, to use their powers for evil.

You must be joking with the "look what these poor mongrels had to do to survive" angle.
As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good?
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Jolly
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Geaux Tigers!
I understand the need for big banks in some circumstances.

I'd like to see legislation, though, aimed at A) giving regional and smaller banks a bit of a competitive edge in some things and B)taking away some of the bank-type services from Credit Unions.
The main obstacle to a stable and just world order is the United States.- George Soros
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TomK
HOLY CARP!!!
Horace
Sep 10 2016, 02:19 PM
TomK
Sep 10 2016, 02:15 PM
jon-nyc
Sep 10 2016, 02:07 PM
Actually the vast majority - over 95% - of scam accounts didn't even have fees associated with them. For the most part the employees tried not to affect the customer at all. They didn't want the customer to notice.

They were scamming their employer.
Just keeping their jobs. Doing what they need to do to pay the mortgage. There is a really sad story here and it's not about scamming.
Actually, yes, it is about scamming.

And about disproportionate opportunities available to those who work directly with money, to use their powers for evil.

You must be joking with the "look what these poor mongrels had to do to survive" angle.
Nope there a world down there of people trying to get by. I'm not saying it's right or it is good. I'm saying there are pressure on people to do things to keep their job. And yes, the ultimate burden is on the employer.
Edited by TomK, Sep 10 2016, 02:45 PM.
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Horace
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HOLY CARP!!!
Ok then. Be wary of people who work with money.

As odious as that idea may be.

Just know it, is all.

Morons.
As a good person, I implore you to do as I, a good person, do. Be good. Do NOT be bad. If you see bad, end bad. End it in yourself, and end it in others. By any means necessary, the good must conquer the bad. Good people know this. Do you know this? Are you good?
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Riley
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HOLY CARP!!!
Jolly
Sep 10 2016, 02:28 PM
I understand the need for big banks in some circumstances.

I'd like to see legislation, though, aimed at A) giving regional and smaller banks a bit of a competitive edge in some things and B)taking away some of the bank-type services from Credit Unions.
Why B?
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Steve Miller
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Bull-Carp
What are we to think of bank management who let these practices
continue for 5 years without doing anything about them?
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