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Thread: Wells Fargo scam latest in a string of infractions

  1. #1

    Wells Fargo scam latest in a string of infractions

    http://www.usatoday.com/story/money/...ions/90139724/

    Where is Elizabeth Warren when you need her? Nobody got arrested for this.

    Wells Fargo employees created unauthorized bank accounts in order to boost sales, prompting the bank to fire 5,300 employees. Wells Fargo must pay massive fines and restitution to its customers. USA TODAY

    Wells Fargo's (WFC) $185 million hit in civil penalties for secretly opening millions of accounts without customers' permission is just the latest regulatory black eye for the bank.

    Wells Fargo, the biggest U.S. bank by stock market value, Thursday agreed to pay $100 million in restitution to victims to the Consumer Financial Protection Bureau fund, as well as a $35 million penalty to the Office of the Comptroller of the Currency and $50 million to the city and county of Los Angeles. The bank agreed to pay the fine in connection to actions allegedly committed by more about 5,300 to open accounts unbeknownst to customers and racking up fees as a result.

    "It's serious. It shows rogue employees and management that's not effective," says Erik Oja, analyst at S&P Global Equity Research, pointing out that at this point it's unclear how widespread this alleged fraud was. "It shows bad incentives as well."

    It's just the latest of many penalties levied on Well Fargo. The bank faced or settled four key areas of litigation as of the end of 2015 including several with much larger settlements connected with:

    * FHA insurance claims. Wells Fargo agreed to pay $1.2 billion in February 2016 to settle complaints from the Department of Justice, the U.S. Attorney's Office for the Southern District of New York, the U.S. Attorney's Office for the Northern District of California and Housing and Urban Development over claims associated with the bank's Federal Housing Administration loans between 2001 and 2010. The complaint suggested the bank improperly received insurance proceeds from HUD from some loans that defaulted. The complaint suggests Wells Fargo made claims for insurance for mortgages it knew didn't qualify and didn't disclose problems.

    * Visa and Mastercard interchange fees. Wells Fargo is part of a group of defendants that have agreed to pay $6.6 billion on claims merchants were overcharged for credit card fees or improperly bundled other products. Wells Fargo, in addition to Visa and Mastercard, on July 13, 2012, signed a agreement to settle the allegations.

    * Mortgage products. Wells Fargo as well as firms it has previously acquired continue to be investigated for alleged wrongdoing in making home loans during the housing boom of the middle of the 2000s. Wells Fargo has agreed to pay $10 billion in fines in the past eight years with a vast majority of those being associated with mortgage investigations, says Robert Hockett, professor of law at Cornell Law. The largest of those was a $5.4 billion fine in February 2012, Hockett says.

    * Order of posting. Wells Fargo in August 2010 was ordered to pay remediation of $203 million connected to the way the bank processed debit card payments for customers. By allowing a payment to hit the ledger before a deposit, the bank was allegedly able to generate overdraft fees. Several of these cases were still pending at the end of last year. Wells Fargo filed a petition for the U.S. Supreme Court to review the decision but is still awaiting word, according to its annual regulatory filing.

    Wells Fargo in its regulatory filing says it has reserved for losses associated with these cases. "Although there can be no assurance as to the ultimate outcome, Wells Fargo and/or our subsidiaries have generally denied, or believe we have a meritorious defense and will deny, liability in all significant litigation pending against us," the filing says.

    Regarding the latest settlement connected with the secret account openings, Wells Fargo spokeswoman Richele Messick said Wells Fargo had already refunded in the first quarter any associated fees prior to the settlement. The total repaid to customers was $2.6 million. The bank has since "strengthened our policies" regarding the opening of new accounts, Messick says. Consumers should check their accounts and call Wells Fargo with any questions, she says.

    Wells Fargo isn't alone in facing regulatory scrutiny that has led to large fines. Wells Fargo ranks just fourth among global banks in terms of total value of fines paid over the past eight years at $10 billion, Hockett says. Bank of America (BAC), JP Morgan Chase (JPM) and Citigroup (C) have paid more, $58 billion, $31 billion and $13 billion, respectively, during the same period.

    The latest Wells Fargo alleged scam, however, opens a new front the types of frauds banks are accused of, Hockett says. More investigation is likely ongoing and will be critical to understanding how high in the organization the shadow account openings were known about and why it wasn't being monitored, Hockett says.

    But most other cases of recent alleged bank fraud are usually connected with mortgage lending or areas far from consumers and more associated with esoteric manipulations of interest rates, Hockett says. "What's surprising is that with this latest scandal, it's fraud with the garden variety types of accounts," he says.
    Last edited by timosman; 09-11-2016 at 04:04 PM.



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  3. #2
    I have a line of credit there , fairly low interest . I do not use it . I did use it once for about 12K , I was making a payment back ea month of about 10 percent of it . They called me halfway through wanting to know if I would be interested in paying it off sooner . I got off the phone and was wondering what was wrong with them , if I wright a check for the whole thing they will get no interest . I have known since then there was something wrong there .

  4. #3

    $124 million payday for Wells Fargo exec who led fake accounts unit

    http://www.npr.org/sections/thetwo-w...rs-record-fine

    September 13, 2016



    A federal agency used her Wells Fargo unit as a cautionary tale, imposing the largest fine it's ever levied. Her bank fired some 5,300 employees for acting "counter to our values." But questions are now circulating about Carrie Tolstedt, the unit's leader, who's set to depart her post with $124.6 million in stock and options, and whose compensation for the five years targeted by the Consumer Financial Protection Bureau included a yearly incentive bonus of $5.5 million in stock, to go along with her base pay and other bonuses.

    Many of those questions were raised in a Fortune story Monday that wondered whether the situation was ripe for Wells Fargo to try to "claw back" some of the stock options it had awarded Tolstedt, who exits after years of heading Wells Fargo's huge community banking division.

    If you're catching up to this story, here's how NPR's Yuki Noguchi reported it today for our Newscast unit:

    "When Carrie Tolstedt's retirement was announced in July, Wells Fargo CEO John Stumpf called her a 'dear friend,' 'role model' and 'standard-bearer for our culture.'
    "Less than two months later, the bank agreed to pay the largest penalty ever imposed by the Consumer Financial Protection Bureau — $185 million — for creating more than 2 million unauthorized customer accounts over five years. Wells Fargo says Tolstedt's retirement was a personal decision, and that her stock holdings were earned over her 27-year tenure."

    The Fortune article seemed to hit a nerve: One day later, Wells Fargo announced it will eliminate all product sales goals in retail banking, as of the start of 2017.

    That drastic change was announced just two months after Wells Fargo said Tolstedt would retire at the end of 2016. Weeks after that announcement, Tolstedt handed off her duties to another executive.

    When we contacted Wells Fargo to ask about the situation Tuesday, senior vice president Mark Folk said Tolstedt is remaining with the company through December to help the transition process.

    Folk says Tolstedt's $124.6 million comes from "stock that she either owns outright" or in the form of options.

    As for the size of Tolstedt's holdings, Folk noted that she was at the company for nearly 30 years. When we asked about a potential "claw back" of millions in compensation for Tolstedt, Folk said Wells Fargo isn't talking about that today.

    Wells Fargo saw a number of changes during Tolstedt's tenure — particularly at the end of it. Consider that in 2014, around the middle of the roughly five-year period reviewed by the CFPB, Wells Fargo set a record in reporting net income of $23.1 billion, on revenue of $84.3 billion. Tolstedt's unit accounted for around $14 billion of that year's net income.

    In that year, as in every year in the 2011-2016 period that the CFPB covered in its consent order, Tolstedt collected $5,500,000 in stock as her portion of the performance share award that's split among Wells Fargo's top executives, according to the bank's proxy reports. That stock normally takes a three-year period to vest fully.

    As the Fortune piece notes, Tolstedt wasn't singled out in the CFPB's actions, and it's not clear what if any involvement she had with her unit's use of the tactic of creating fake accounts to trigger incentive bonuses. But the magazine also spoke to a banking reform advocate who asked about claw-back policies: "If they don't apply here, when will they apply?"

  5. #4
    Millions of counts of fraud and identity theft committed continuously and regularly over a period of years. Yet not a single person goes to jail.
    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  6. #5
    After Wells Fargo pays the government fine and give Tolstedt a nice $125M retirement bonus, they still turn a hefty profit. I wonder about the 5,300 employees being fired? How many were low wage earners, knowing nothing of the fraud, and got fired to make Wells Fargo look good? Crony capitalism at it's finest.

  7. #6
    Quote Originally Posted by AZJoe View Post
    Millions of counts of fraud and identity theft committed continuously and regularly over a period of years. Yet not a single person goes to jail.
    Good summary. Front page.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  8. #7
    If you are working some place that screwed up , you are better off they let you go .

  9. #8
    Quote Originally Posted by oyarde View Post
    If you are working some place that screwed up , you are better off they let you go .
    The problem is most places are screwed up.



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  11. #9
    Quote Originally Posted by timosman View Post
    The problem is most places are screwed up.
    True , but ya do not want to end up working at one that is so screwed up people start thinking about wanting to jail you for fraud after you quit or get fired.

  12. #10
    Quote Originally Posted by oyarde View Post
    True , but ya do not want to end up working at one that is so screwed up people start thinking about wanting to jail you for fraud after you quit or get fired.
    That is something you do not know until you start working there.

  13. #11
    Quote Originally Posted by oyarde View Post
    If you are working some place that screwed up , you are better off they let you go .

    Unless you have a wife and three children to feed, clothe, house, keep healthy, etc. and so on...
    freedomisobvious.blogspot.com

    There is only one correct way: freedom. All other solutions are non-solutions.

    It appears that artificial intelligence is at least slightly superior to natural stupidity.

    Our words make us the ghosts that we are.

    Convincing the world he didn't exist was the Devil's second greatest trick; the first was convincing us that God didn't exist.

  14. #12
    Quote Originally Posted by osan View Post
    Unless you have a wife and three children to feed, clothe, house, keep healthy, etc. and so on...
    Yeah you have to have some money put back .

  15. #13
    Quote Originally Posted by osan View Post
    Unless you have a wife and three children to feed, clothe, house, keep healthy, etc. and so on...
    In that case just suck it up and take it like a man.

  16. #14
    Quote Originally Posted by timosman View Post
    In that case just suck it up and take it like a man.
    Tell that to your hungry children.
    freedomisobvious.blogspot.com

    There is only one correct way: freedom. All other solutions are non-solutions.

    It appears that artificial intelligence is at least slightly superior to natural stupidity.

    Our words make us the ghosts that we are.

    Convincing the world he didn't exist was the Devil's second greatest trick; the first was convincing us that God didn't exist.

  17. #15
    I am trying to figure out where the restitution to customers comes from . If the accounts were all fake , would that not be created with the banks money ?

  18. #16
    Quote Originally Posted by osan View Post
    Tell that to your hungry children.
    I was not suggesting leaving the job if your are not in a position to do so. Which part of suck it up did you not understand?



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  20. #17
    Quote Originally Posted by timosman View Post
    I was not suggesting leaving the job if your are not in a position to do so. Which part of suck it up did you not understand?
    I guess you lost me somewhere with that. Probably not important enough to bother explaining it to my thick self.
    freedomisobvious.blogspot.com

    There is only one correct way: freedom. All other solutions are non-solutions.

    It appears that artificial intelligence is at least slightly superior to natural stupidity.

    Our words make us the ghosts that we are.

    Convincing the world he didn't exist was the Devil's second greatest trick; the first was convincing us that God didn't exist.

  21. #18
    Quote Originally Posted by oyarde View Post
    I am trying to figure out where the restitution to customers comes from . If the accounts were all fake , would that not be created with the banks money ?
    I believe that the real customers were charged various fees on the fake accounts created in their names. So the damages to customers would be the nickel and dime (or $20-$50) charges, plus time and stress trying to resolve the problems.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  22. #19
    Quote Originally Posted by Brian4Liberty View Post
    I believe that the real customers were charged various fees on the fake accounts created in their names. So the damages to customers would be the nickel and dime (or $20-$50) charges, plus time and stress trying to resolve the problems.
    Ahh , so the fake accounts were real people and not fictitious . Oh yeah, that is bad .

  23. #20
    So , then , there really were very many thieving people involved in this . That is a helluva lot of thieving culture in an area where you try and hire honest people to avoid it . So Wells is like a Cult ?

  24. #21
    Quote Originally Posted by oyarde View Post
    So , then , there really were very many thieving people involved in this . That is a helluva lot of thieving culture in an area where you try and hire honest people to avoid it . So Wells is like a Cult ?
    In case you did not know most companies are cult like at the moment. Let's say thinking is heavily discouraged.

  25. #22
    Quote Originally Posted by timosman View Post
    In case you did not know most companies are cult like at the moment. Let's say thinking is heavily discouraged.
    I am grateful to be out of the game ( retired)

  26. #23

    Senator Elizabeth Warren questions Wells Fargo CEO John Stumpf at Banking Committee Hearing

    Nice kabuki theater. Nobody goes to jail nor has to return any money either. Where is the after show party?


  27. #24
    Warren claimed to be native american to get a cushy Ivy league job and that never harmed her with that fraud. No she's in charge of letting these people get a pass. Go figure
    “…let us teach them that all who draw breath are of equal worth, and that those who seek to press heel upon the throat of liberty, will fall to the cry of FREEDOM!!!” – Spartacus, War of the Damned

    BTC: 1AFbCLYU3G1dkbsSJnk3spWeEwpqYVC2Pq



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  29. #25
    Report: Wells Fargo Retaliated Against Whistleblowers Who Exposed Bank's Criminal Practices
    http://www.zerohedge.com/news/2016-0...sed-banks-ille
    "Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired", …

    "I endured harsh bullying ... defamation of character, and eventually being pinned for something I didn't do," said Heather Brock, who was fired earlier this month as a senior business banker at a Wells Fargo branch in Round Rock, Texas.

    "They ruined my life," Bill Bado, a former Wells Fargo banker in Pennsylvania … Bado not only refused orders to open phony bank and credit accounts. The New Jersey man called an ethics hotline and sent an email to human resources in September 2013, flagging unethical sales activities he was being instructed to do. Eight days after that email … Bado was terminated. …

    Ethics hotlines are exactly the kind of safeguards put in place to prevent illegal activity from taking place … Wells Fargo CEO John Stumpf made precisely that point on Tuesday when he testified before angry Senators. "Each team member, no matter where you are in the organization, is encouraged to raise their hands," … "We want to hear from them."

    Only, that's not what allegedly happened at Wells. … according to a former HR staffer, Wells had an explicit protocol for retaliating against "tipsters" - fire them for a minor offense, like being late. One former Wells Fargo human resources official … said the bank had a method in place to retaliate against tipsters. He said that Wells Fargo would find ways to fire employees "in retaliation for shining light" on sales issues. It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions. "If this person was supposed to be at the branch at 8:30 a.m. and they showed up at 8:32 a.m, they would fire them," … Another six former Wells Fargo employees told CNNMoney they witnessed similar behavior at Wells Fargo …

    If the stories are confirmed … this would implicate not only the entire HR chain, but also the bank's GC, the entire corner office and even the Board of Directors. …

    the above allegations would suggest that Stumpf lied before the Senate …

    Bill Bado … says the firing took a huge toll on his life: it put a permanent stain on his securities license, scaring off other prospective bank employers. … the New Jersey man's house is on the verge of being foreclosed on and he's working part-time, at Shop-Rite. …

    "Everything submitted to the Ethics Line is investigated," a Wells Fargo spokeswoman said. While nobody doubts that, it is what happened next that is the problem. While ethics complaints are supposed to be confidential, documents show that Bado did speak out before he was fired. On September 19, 2013, Bado wrote an email to a Wells Fargo HR rep and copied his regional manager, where he detailed improper sales tactics. Documents show Bado was fired -- for "excessive tardiness" -- just eight days later. …

    "I have been asked on several occasions to do things that I know are not ethical and would be grounds for discharge," Bado said in the email to HR. … a branch manager on "many occasions" asked him to send out a debit card, "pin it," and enroll customers in online banking, "all without the customers request or knowledge." …

    Brock, the business banker from Texas, told CNNMoney she experienced a similar situation. … fired soon after she contacted the company's ethics line about illegal sales practices she witnessed. … Brock was fired earlier this month … A current Wells Fargo employee who works in Brock's branch vouched for her version of events. …
    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  30. #26
    Coincidentally. someone I know has been pestered this week by Wells Fargo with "courtesy calls", wanting to serve them better by opening more accounts.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  31. #27
    Quote Originally Posted by Brian4Liberty View Post
    Coincidentally. someone I know has been pestered this week by Wells Fargo with "courtesy calls", wanting to serve them better by opening more accounts.
    Sounds about right , they need to start making that money back .

  32. #28
    California is looking at identity theft. I would be shocked if anything comes of this other than some headlines or talking points for some politician to use down the road.


    http://www.bloomberg.com/news/articl...accounts-probe

    California prosecutors are investigating whether Wells Fargo & Co. bankers committed criminal identity theft by creating millions of fraudulent accounts.

    Attorney General Kamala Harris served a search warrant on the bank seeking the names of employees who opened unauthorized accounts from May 2011 to July 2015. The warrant, provided by Harris, also demands detailed communications, the bank’s fee structure and a calculation of losses suffered by affected customers.

    Harris’s office said a probe by Los Angeles officials revealed state penal code violations for impersonation and unauthorized use of personal information for checking and savings accounts and also for lines of credit, credit cards, mortgages and wealth management accounts, according to a filing attached to the Oct. 5 search warran
    “…let us teach them that all who draw breath are of equal worth, and that those who seek to press heel upon the throat of liberty, will fall to the cry of FREEDOM!!!” – Spartacus, War of the Damned

    BTC: 1AFbCLYU3G1dkbsSJnk3spWeEwpqYVC2Pq

  33. #29
    Warren is such a phony



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