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2 million fake accounts later, Wells Fargo drops sales quotas for its employees

Megan Geuss
On Tuesday, Wells Fargo CEO John Stumpf released a statement promising that the bank would eliminate product sales goals for its employees after thousands of employees were found to have opened fake accounts using real customer names and identification in order to boost internal sales numbers. Stump did not go so far as to say that the practice of cross-selling financial products would end at Wells Fargo, but The Wall Street Journal reported that the company would put a temporary hold on the practice.
Last week, three regulators fined Wells Fargo $185 million, including a $100 million fine from the Consumer Financial Protection Bureau (CFPB). Wells Fargo fired 5,300 employees who allegedly created about 2 million fake accounts. In some cases, consumers were charged low balance and overdraft fees when Wells Fargo employees temporarily moved money from customers’ approved accounts to accounts they had not approved.
In his statement, Stumpf said, “We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers.” The sales goals will be eliminated effective January 1.
According to the WSJ, Wells Fargo CFO John Shrewsberry said last week that 10 percent of the 5,300 employees fired were branch managers or higher in rank, but he stopped short of naming any top-ranking managers who may have been laid off or disciplined in response to the revelations. According to USA Today, Shrewsberry told an audience at a financial services conference today that "unauthorized customer account activity peaked in 2013 and two-thirds were concentrated in the southwest US."
The third-party consulting firm that Wells Fargo hired to do its internal investigation only looked at unauthorized account creation from 2011 and later.
The Senate Banking Committee will hold a hearing on September 20 to investigate how such widespread fraud occurred within the company.
2 million fake accounts later, Wells Fargo drops sales quotas for its employees Reviewed by Chidinma C Amadi on 10:09 PM Rating: 5

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