Wells Fargo Commits Fraud and Gets a Hand Slap
Fraud – noun – Wrongful or criminal deception intended to result in financial or personal gain.
Employees of Wells Fargo created millions of unauthorized bank and credit card accounts without the consent of their customers. Why did they do it? They wanted to boost their sales figures and make more money. As a result, 5,300 employees were fired and the bank was fined 185 million dollars.
Now if you or I committed fraud (and yes this is fraud), we would go to jail. Anyone going to jail over this? Of course not!
Listen to the spin that is coming from Wells Fargo.
The CEO on Mad Money had this to say:
“We are sorry. We deeply regret any situation where a customer got a product they did not request,” Stumpf said, “There is nothing in our culture, nothing in our vision and values that would support that. It’s just the opposite. Our goal is to make it right by a customer every time 100% and we didn’t do that, we feel accountable.”
Let me take the spin out.
“We are sorry (we got caught). We deeply regret any situation where a customer (had fraudulent transactions in their name) got a product they did not request,” Stumpf said, “There is nothing in our culture (apparently no oversight), nothing in our vision (except we would do anything to make money) and values (seriously what values?) that would support that. It’s just the opposite. Our goal is to make it right by a customer every time 100% and we didn’t do that, we feel accountable.” (because we got caught)
Sorry Mr. Stumpf – I think that this speaks a lot about your company values which you are in charge of. You had 5,300 employees involved in this fraudulent act.
Does the CEO feel responsible? Of course not! He is not going to resign over this little ordeal. Carrie Tolstedt was the Wells Fargo executive in charge of the unit where employees opened unauthorized accounts. (Just a note: The CNBC article said where employees “allegedly” opened unauthorized accounts. Come on CNBC – 5,300 people were fired and a largest fine in history was handed down.) She recently left the bank (probably knew that she was about to be busted) with 124.6 million in stock, options, and restricted shares. Don’t worry about Ms. Tolstedt – she will be just fine.
When is it not ok to commit fraud? Why do the banks commit crimes and get away with it? These companies should have the biggest of fines brought against them to where their pocket books truly feel it. How about jail time for fraud? How about the board of directors firing the CEO and other executives because it happened under their watch?
Where are the politicians? Why aren’t they going after the big bank? They go after baseball players for using performance enhancing drugs. Yes, that really matters. I guess the political ramifications are just too much. So, they turn and look the other way. After all, they depend on the campaign contributions.
Although 185 million is a lot to you and me, it is nothing to a banking giant such as Wells Fargo. Every American should boycott this bank and send a message. If they are capable of pulling off a con like this, what else will they do in the future when no one is watching?
The unfortunate aspect of this story is that no one in the media appears to be outraged by this display of unethical behavior. Unfortunately, that is what has happened to this country. There is so much of it we don’t even think twice anymore.
Bob Brooks is host of the Prudent Money Radio show. Bob is also a financial advisor who helps people set and achieve financial goals. For more information or to set up a phone consultation, email Judy Parrish at firstname.lastname@example.org .