Regulators have their eyes on Wells Fargo employee practices — specifically aimed at the bank’s sales culture when it came to pushing products and services on consumers.
The San Francisco-based lender is under pressure for the tactics its employees may be using to secure those coveted customers toward its offerings. A Wall Street Journal report on the subject details the controversy that’s gaining attention. Citing anonymous sources said to be close to the matter, WSJ reported that regulators are investigating if the bank has been too forward in pushing their employees toward meeting harsh sales quotas.
Those quotas, of course, are in question because of the pressure employees may have felt to push products and services on consumers who may not have needed them. The Office of the Comptroller of the Currency and the San Francisco Federal Reserve are the two regulatory bodies currently looking into the matter.
This case follows a lawsuit in May from Los Angeles on a similar subject — highlighting accusations that Wells Fargo’s growth strategy was banking on pushing these types of practices. That specific suit accuses the bank of forcing its retail employees to breach ethical guidelines and laws by opening false accounts and charging customers for products without informing them or gaining their permission.
L.A. City Attorney Mike Feuer claimed that Wells Fargo opened unauthorized accounts in customers’ names, refused to close those accounts even after those customers complained and even “raided” client accounts for funds to open new accounts — all in an effort to meet sales quotas.
Among other allegations, the unauthorized accounts set up by Wells Fargo employees charged fees to clients and also damaged their credit.
On the subject of the most recent accusations, spokeswoman Mary Eshet provided the following statement:“Wells Fargo’s culture is focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members.” She said the company had adjusted its sales practices and quotas, even before the L.A. lawsuit came about.
WSJ interviewed current and former bank employees on the subject, including Khalid Taha (personal banker) who said daily/hourly sales goals are tough at the company, claiming that “it’s an everyday worry for me.” He also remarked that his manager was strict on him and made his life “like hell” if he didn’t meet quotas of producing 10–20 solutions per day.
Raul Ramirez, a former Wells Fargo employee who quit over sales pressure, claimed the following: “It was kind of weird, because people were going to the blood banks to get money who were struggling financially … The majority of the time we knew … the account would be frozen.”
Taha noted that sales goals need to be adjusted for the company to ensure its not seeking unrealistic goals that pressure employees to push those products and services on customers more than needed.
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