Who’s to blame? Wells Fargo or the system itself?

1.5 million fake accounts, 600,000 fake credit cards and 5,300 Wells Fargo employees fired

A Wells Fargo bank in Oakland, Calif. (AP Photo/Ben Margot, File)
A Wells Fargo bank in Oakland, Calif. (AP Photo/Ben Margot, File)

Earlier this month, Wells Fargo, was fined a $185 million fee for opening unauthorized checking accounts and credit cards for its customers. The findings revealed that over 1.5 million checking accounts and nearly 600,000 credit cards had been opened under customer’s identities who never asked for them.

“We believe in values lived not phrases memorized. If you want to find out how strong a company’s ethics are, don’t listen to what its people say, watch what they do.” – CEO of Wells Fargo, John Stumpf.

Immediately upon news breaking, Wells fired 5,300 employees. This was a way for Wells to right its wrong, but what really happened was something much more sinister and complex.

Since the 2008 mortgage crisis, Wells Fargo (and most of the retail banking world) has been focused on selling more products to the same consumers as a way of gaining their revenue. To do this, Wells Fargo implemented an initiative called “Gr-eight” which meant that each banking customer should have eight products with Wells Fargo. In their 2010 Annual Report, the term “cross-sell” appears 20 times, while referring to its branches as “stores”. Cross-selling products and services became all Wells Fargo cared about.

The bank put high-pressure on their Sales teams. They’d have sales recap calls four times a day, constantly demanding more and more sales every hour.

“I had managers in my face yelling at me. They wanted you to open up dual checking accounts for people that couldn’t even manage their original checking account,” said Sabrina Bertrand to CNN Money. She worked as a licensed personal banker for Wells Fargo in Houston in 2013.

That level of pressure pushed corruption. Bankers feared for their jobs. They had to hit the expected number of sales or get fired. So, they began to find ways to cut corners.

Bankers would engage in an activity that was known at Wells Fargo as pinning which was designed as a way to increase the amount of activated ATM cards at their branch. To do this, bankers would assign a new ATM card to an account using generic email accounts like [email protected] or [email protected] Then they’d send the ATM card to their brand, go to an ATM and activate the card.

Anthony Try, a personal banker and sales representative at Wells Fargo, told CNNMoney that he believes “management was fully aware of this” but his bosses deliberately “turned a blind eye.” Try thought the illegal activity was systemic and “ingrained in the culture for a long time. He quit Wells Fargo in 2013 because he no longer believed in what he was doing.

At a Senate committee hearing on Wells Fargo’s account-opening practices, Senator Elizabeth Warren put things into perspective.

If one of your tellers took a handful of $20 bills out of the cash drawer, they probably would be looking at criminal charges for theft.

They could end up in prison. But, you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket. And when it all blew up, you kept your job, you kept your multimillion dollar bonuses and you went on television to blame thousands of $12 an hour employees who were just trying to meet cross-sell quotas that made you rich. This is about accountability.

Over the course of this scheme, the personal financial growth of the CEO of Wells Fargo increased by $200 million. This was a failure on the executive level that impacted the lives of their team and their customers. The executives were so focused and motivated by profit, that they forgot about their purpose and people.

What if money wasn’t involved?

What if everyone at Wells Fargo made the same amount of money no matter how much they sold? Would they then only be motivated by providing the customer with exactly what they need? Would this scheme had ever been created in the first place?

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” – Steve Jobs

The employees at Wells Fargo were forced to meet impossible expectations set by those at the top at the threat of their livelihood. What if the executives and Wall Street as a whole told their employees to talk with their customers, learn about their lives, and then take the knowledge you know about their company’s products and services to make their lives better, imagine what the state of business could be.

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