
Wells Fargo uncovers up to 1.4M more fake accounts - cinquemb
http://money.cnn.com/2017/08/31/investing/wells-fargo-fake-accounts/index.html
======
cknight
So one of the things I did for my project was to scan headlines related to
corporate ethics, so I could start listing overviews of a company's record in
this area.

Needless to say, Wells Fargo has pretty much been filling its own page in ways
that no other company has been able (with the exception of Uber):
[https://suitocracy.com/company/wells-
fargo](https://suitocracy.com/company/wells-fargo)

Seeing it all laid out like that really makes me wonder how it still gets by
with so few consequences.

~~~
samstave
My mom worked for Wells, after it aquired Wachovia, which prior acquired the
other bank she worked for...

She said they were the most corrupt orgs she had worked with. Specifically,
the Wachovia Construction Loan dept - then later Wells...

All corrupt.

~~~
r00fus
Just imagine if this were just "how things worked at TBTF banks"? I would not
be surprised at all.

~~~
samstave
I assume that it is

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a3n
No, they aren't fake accounts, they're real accounts, inflicted on customers
against their will and without their knowledge, and they come with real
damage.

~~~
travmatt
I'm similarly fascinated by the use of the passive voice when they are
describing Wells Fargo committing more crimes. Imagine if the crime was
committed upon them instead: "Bank robber uncovers that he robbed bank for
more money than originally admitted."

~~~
tedunangst
That's not passive voice.

~~~
briholt
Something like passive voice was used in that comment.

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zeta0134
This CNN article has an autoplaying video. All of my attempts to find a way to
block the offending content have failed; it starts blocked, but as soon as I
scroll down the page, some javascript animation moves the non-existent video
to the sidebar. The side-video is hidden, but still loads and plays audio.

Even worse, though I remember the original video being a mere 14 seconds, it
is _still playing_ some nonsense. Does it just loop new video downloads until
I close the tab? Is there no mercy for bandwidth? [/frustrated]

~~~
asdfologist
This abomination needs to stop. Bloomberg.com does this too and it's
infuriating.

~~~
SN76477
Mute every new domain with an unmuted whitelist addon would be nice.

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QAPereo
If this were a crime being committed by an individual on the same scale, what
could that person expect to receive for a sentence? I really don't know the
answer to that and I'm curious, but I strongly suspect that fines wouldn't be
in it and it would be more of a custodial sentence.

~~~
asmithmd1
Wells Fargo claims it isn't the leadership - it is just a few thousand bad
apple low-level employees and they have been fired.

[http://money.cnn.com/2016/09/08/investing/wells-fargo-
create...](http://money.cnn.com/2016/09/08/investing/wells-fargo-created-
phony-accounts-bank-fees/index.html)

~~~
fossuser
I find it interesting when organizations use the 'few bad apples'analogy for
this kind of thing.

The full statement is 'A few bad apples spoil the barrel' \- which comes from
the concept that a rotting apple lets off ethylene gas which will cause the
apples surrounding it to also turn.

This is probably a better analogy than intended for the companies that
incorrectly use it since bad behavior spreads like a corrupting influence
through an organization and fixing it would really require larger changes than
just getting rid of a couple people.

~~~
SomeStupidPoint
There's also the delightful expression: "A fish rots from the head down."

I'm deeply skeptical of the claim that you can have a few _thousand_ instances
of "rot" without there being somewhere higher in the company it's being spread
from. If 1% of the company is "rotting", then something in leadership is
"rotting".

~~~
mtgx
When you have a _thousands_ of "rotten apples" it's clearly a systemic
problem.

------
pasbesoin
At some point, the "disconnect" between shareholders (even and as, on a
massive scale -- especially and specifically these "too big to fail"
institutions) and their businesses needs to be breached. Businesses with
chronic, systemic wrong-doing need to be put down. Wells Fargo is a prime,
current candidate.

If this were a Democratic administration, or a rational Republican one, I'd
say, it's time for the FDIC (too bad Sheila Bair's no longer its head) to come
in, take over, and sell off Wells Fargo.

And that we have a Savings and Loan type investigation and prosecution,
flipping the smaller fish until we get to the top and lock them up. (And strip
them of their ill-gotten personal assets.)

At this point, shareholders should be well informed as to where their growth
and profits are coming from. If they want to invest in such behavior, they
should equally reap the results, in financial terms.

In other, if currently unrealistically ideal words, " _No one_ is above the
law."

At _some_ point, you have to act to effectively put the brakes on such
behavior. Otherwise, it takes over.

~~~
kbutler
> If this were a Democratic administration, or a rational Republican one, I'd
> say, it's time for the FDIC (too bad Sheila Bair's no longer its head) to
> come in, take over, and sell off Wells Fargo.

#1) but you didn't when it was a democratic administration

#2) why does the party of the president determine what you would say?

The history of too big to fail is littered with discarded ethics and
increasing moral hazard on both sides of the aisle (80s, 90s, 00s, and 10s).

~~~
pasbesoin
I did say this. And I was increasingly disappointed in the Democrats' "weak
tea" responses.

It's a good point about "administration", too. I used it as a poor and
incorrect stand-in for "majority".

At this point in time, I see some sort of corrective action as more likely
from the Democratic side or from those Republicans who do not equate
"conservative" with an ideology of personal greed and self-interest. For one
point, systemic criminal behavior that also abuses your customer base, does
_not_ tend to conserve the institution -- unless it is or is granted quasi-
monopoly status where those affected have no means of redress -- nor perhaps
meaningful, better alternatives (e.g. an oligarchy of corruption, such as
existed in the mortgage and mortgage-backed-securities market leading up to
the 2008 crash).

Anyway, yeah, I fear even more our chances in the face of "the majority's"
drive to neuter and dismantle existing law and regulation. But I don't believe
either side has had too much interest in substantially, not to mention fully,
addressing these problems. Not since..... Well, I guess since Carter. And the
now seemingly anomalous prosecution of the Savings and Loan scandal in the
latter '80's.

Mine's a rather limited perspective. But the string of incidents -- story
after story about institutions getting off with fines that pale in comparison
to their profits (those at the expense of often massive externalized costs) --
seems pretty apparent.

And actual jail time, as a result of the Savings and Loan malfeasance, did
seem to at least produce a "tap on the brakes", for a short time.

------
droopyEyelids
[https://newrepublic.com/article/144144/give-wells-fargo-
corp...](https://newrepublic.com/article/144144/give-wells-fargo-corporate-
death-penalty)

Our government granted Wells Fargo’s corporate charter, and it can take it
away.

~~~
arca_vorago
I've been arguing the gov use that threat for a while now, nice to see I'm not
the only one. I got the idea reading about the British and Dutch east India
companies, as the charter was the sword of Damocles the gov had over the
companies.

------
bdcravens
While we consider Wells Fargo's ethical failures, worth noting that one of the
startup darlings, Stripe, relies on Wells Fargo:

[https://stripe.com/wells-fargo/legal](https://stripe.com/wells-fargo/legal)

~~~
uiri
That is an agreement with Wells Fargo's Canadian branch/subsidiary. Wells
Fargo Canada appears to provide services solely to businesses (i.e. no retail
banking) so I believe that this subsidiary has nothing to do with Wells Fargo
retail branches behaving unethically.

~~~
throwaway613834
This is the kind of comment that just blows my mind (in a good way) when I
read it. How do you suddenly just discover facts like this? Do you research it
or do you just happen to know it beforehand? If it were me I would have just
assumed it's the same Wells Fargo; it wouldn't have occurred to me to check
that it's the one in Canada.

~~~
uiri
I clicked through and read the first sentence of the second paragraph:

 _This Wells Fargo Addendum constitutes a legal agreement between you, Stripe,
and Wells Fargo Bank, N.A., Canadian Branch (“Wells Fargo”)._

Then, I googled "Wells Fargo Canada" and found their website:
[http://www.wellsfargo.ca/locations](http://www.wellsfargo.ca/locations)

The first sentence on their website is: _Our team in Canada is dedicated
exclusively to mid-sized and larger companies._

~~~
throwaway613834
Wait, what? That's not what I see:

> This Wells Fargo Addendum constitutes a legal agreement between you, Stripe,
> and Wells Fargo Bank, N.A. and Wells Fargo Merchant Services, L.L.C.
> (collectively, “Wells Fargo”).

------
flatfilefan
Seems like forensic analysts did not do such a good job the first time. I
wonder how could 1.4M fake accounts be missed when you do an audit looking for
... fake accounts?

~~~
ben_jones
Were I a gambling man I'd wager either the analysis was incompetent by design
from the very beginning, or the analysis was fine but the numbers were cherry
picked to be technically accurate but utterly misleading to the public.

------
johnwheeler
All these headlines are way overblown by the media. If you think this type of
behavior is restricted to wells fargo (like the media is making it seem),
you're wrong. They just got caught.

The total damages done to wells custormers are in the low millions, while
wells fargo makes upwards of 20 billion a year. What I'm saying is it's a
product of a bad incentive system--not criminal master planning by the
managements to raise profits.

~~~
a3n
That's the beauty of a "bad incentive system" that is designed by management:
plausible deniability.

This was the execution of evil master planning by management, which included
indirect rather than direct instruction. They knew that what they rewarded
would get done, no matter the law.

~~~
tedunangst
Seems like a lot of work to make a few million dollars. Not to mention
downside risk.

~~~
a3n
And yet here we are, discussing a thing that I seriously doubt happened by
random chance. Was there an internal forum where the thousands of bad apples
came up with this? Or were they reacting to obvious and enforced management
preferences?

~~~
tedunangst
It's pretty obviously bank tellers had perverse incentives. But I'm not sure
it's so very different than a company that pays the QA a bonus for every bug
found, then wonders why the bug tracker is filled with crap.

~~~
empath75
The difference is that filing fake bugs isn't theft.

~~~
kbutler
Yes, it is, just as much as creating fake accounts is.

The difference is just that you're stealing from your employer, instead of
your employer's customers.

