Wells Fargo was caught foisting auto insurance on more than 800,000 customers who only wanted to take out auto loans.

Well, ever since those Wells executives were found guilty and went to jail for falsifying all of those fraudulent savings/checking accounts, they have really cleaned up their .....

Wait....what?  You mean no one went to jail for outright fraud?  Oh...okay, never mind then.

 

Used to be, folks robbed WF. Now, they are the robbers

Tacking insurance onto the loans were part of the bank's "cross-selling" actice of offering products across different segments - which also included opening millions of credit card and bank accounts for people who never asked for them.
It gets better: the expense of the unneeded auto insurance (which covered collision damage) pushed some 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions. And the cherry on top: "among the Wells Fargo customers hurt by the practice were military service members on active duty."
The mechanics of the fraud, via the New York Times:

Here is how the process worked: When customers financed cars with Wells Fargo, the buyers’ information would go to National General, which was supposed to check a database to see if the owner had insurance coverage. If not, the insurer would automatically impose coverage on the customers’ accounts, adding an extra layer of premiums and interest to their loans.
When customers who checked their bills saw the charges and notified Wells Fargo that they already had car insurance, the bank was supposed to cancel the insurance and credit the borrower with the amount that had been charged.

In some cases the bank did just that. In most cases, nobody noticed and the scheme continued: "The Oliver Wyman report indicated that many customers appear not to have notified Wells Fargo of the redundant insurance. This may have been because their payments were deducted automatically from their bank accounts and they did not spot the charges."
The bank ended up paying $185 million to regulators and settled a $142 million class-action lawsuit for more than three million fake accounts opened up by Wells Fargo employees to meet sales quotas.
The 38,000 erroneous letters were allegedly part of a "coding mistake" caught by the vendor responsible for the communications, reports the New York Times.
"We will work with our vendor to ensure these customers receive the appropriate communication — including any refunds they're eligible for," said Bank spokeswoman Catherine Pulley, who also confirmed that the bank mistakenly sent a check to a non-customer.
The bank acknowledged that they signed up hundreds of thousands of customers for auto insurance they did not need - which the bank says they will pay a total of $80 million to make amends to affected customers.
"We'll continue working very closely with our vendor and we expect the remediation to be substantially complete by the end of second quarter, 2018," said Pulley.
What's going on at Wells Fargo?
On top of the credit card, bank account, and auto loan "cross-selling" scams, the beleagured bank also offered refunds to for up to 110,000 customers who were unfairly charged fees to lock in interest rates on mortgages.
Even the way Wells Fargo is offering the refunds sounds shady:

The Wall Street Journal, citing people close to the process, said the bank planned to send letters to customers informing them that they must opt into the possible refund, and estimates that half or fewer will open their mail and respond. Wells Fargo spokesman Tom Goyda said details of the outreach effort were still being worked out but that it would include follow-up phone calls when appropriate and "not just a one-off mailing." -NYT

In early February, the Fed said it would bar Wells from expanding its assets beyond their end-2017 level until it "sufficiently improves its governance and controls."
The Fed also demanded that Wells replace three current board members by April and a fourth board member by the end of the year. The release says the board of directors must also improve its oversight practices. The bank will not be allowed to grow until the Fed approves a detail plan of action to be submitted by the bank.

"The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers,” Yellen said in a statement. "The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers."

As we wrote several weeks ago, Wells pursued a business strategy that prioritized growth over managing risks and offering sufficient oversight of the firm's lending practices. As a result, the firm cheated customers of its auto-lending division and also overcharged some mortgage borrowers. And that was AFTER the cross-selling scandal mentioned above. The bank is also facing a criminal probe into its foreign-exchange desk, which allegedly overcharged its large corporate clients. The firm also lacked "an effective firm-wide risk management framework in place that covered all key risks." This, the Fed says, prevented the serious compliance breakdowns from being adequately reviewed by the board.
Meanwhile, in January we showed that Wells posted the worst mortgage numbers since the crisis - so maybe the Fed's new "growth restrictions" on the bank weren't needed after all.

 

In Dramatic Twist, Wells Fargo Said To Retaliate, Fire Whistleblowers Who Exposed Bank's Illegal Practices

While the recent congressional hearing targeting John Stumpf, in which Elizabeth Warren suggested he should resign and be criminally charged, was nothing more than a "kangaroo court" meant to refocus public anger on banks, with good reason, the reason why we concluded that nothing would actually change is that ultimately there was no evidence the bank's executive management was aware of the bank's illegal, fraudulent tactics involving the creation of some 2 million fake customer accounts to "sandbag" retail banking fees. That assumption, however, may need revision now that CNN reports that it has heard from former Wells Fargo workers - some of whom were named - around the country, who tried to put a stop to the bank's illegal tactics only to be met with harsh, prompt and severe retaliation by the bank.
"Almost half a dozen workers who spoke with us say they paid dearly for trying to do the right thing: they were fired", CNN says, which if confirmed would promptly make this a criminal case, which implicate virtually every senior management member, as such retaliatory practices would suggest not only awareness of what was happening at the bank, but also an even more dramatic response by management seeking to keep these practices under wraps.
Some of the named witnesses made it very clear that the narrative spun by Stumpf in Senate was a lie:
"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, told CNNMoney.
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, a copy of which CNNMoney obtained, Bado was terminated. The stated reason? Tardiness.
To be sure, this is not the narrative Stumpf presented before Congress. Retaliation against whistleblowers is a major breach of trust. Ethics hotlines are exactly the kind of safeguards put in place to prevent illegal activity from taking place and provide refuge to employees from dangerous work environments. Indeed, 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," Stumpf told lawmakers. He mentioned the anonymous ethics line, adding, "We want to hear from them."
Only, that's not what allegedly happened at Wells. It gets worse: 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, cited by CNN, 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," the former human resources official told CNNMoney, on the condition he remain anonymous out of fear for his career.
CNN's investigation was extensive: it spoke to a total of four ex-Wells Fargo workers, including Bado, who believe they were fired because they tipped off the bank about unethical sales practices. Another six former Wells Fargo employees told CNNMoney they witnessed similar behavior at Wells Fargo - even though the company has a policy in place that is supposed to prevent retaliation against whistleblowers. CNNMoney has taken steps to confirm that the workers who spoke anonymously did work at Wells Fargo and in some cases interviewed colleagues who corroborated their reports.
* * *
If the stories are confirmed, it is likely that Wells Fargo would face legal consequences for any retaliation that occurred against employees who called the ethics line; furthermore 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.
"It is clearly against the law for any company (or executives of such companies) to try to suppress whistleblowing," Harvey Pitt, former chairman of the SEC, told CNNMoney in an email. A number of statutes -- including Sarbanes-Oxley and Dodd-Frank -- "make this unambiguously clear," Pitt said.
Worse, confirmation of the above allegations would suggest that Stumpf lied before the Senate, something senator Bob Menendez already hinted at during the hearing, when he brought up one former employee who was allegedly fired after flagging issues directly to Stumpf, according to Senator Bob Menendez.
At the Senate hearing, Menendez read the New Jersey woman's 2011 email to Stumpf, where she described improper sales tactics she felt were "wrong."
"Did you read that email?" Menendez asked Stumpf.
"I don't remember that one," Stumpf replied.
"Okay, well she was fired. ... So much for the safe haven," Menendez said.
* * *
Back to the termination of Bill Bado, who 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. Today, the New Jersey man's house is on the verge of being foreclosed on and he's working part-time, at Shop-Rite.
"You wonder where the justice is," Bado said.
Wells Fargo confirmed to CNNMoney that Bado had worked there. However, the bank declined to comment on why Bado left and and on the ethics complaint with corresponding report number he cited in emails. "Everything submitted to the EthicsLine 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.
He disputed this justification: "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. Furthermore, he said 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 (sic) request or knowledge." Those are precisely the same practices that regulators fined Wells Fargo for three years later and that senators grilled the bank over this week.

* * *
Bado was not alone: Brock, the business banker from Texas, told CNNMoney she experienced a similar situation. The 26-year-old single parent of two young boys was fired soon after she contacted the company's ethics line about illegal sales practices she witnessed. Wells Fargo also confirmed Brock used to work at the company but declined to comment further.
Brock was fired earlier this month, with Wells Fargo accusing her of falsifying documents - a charge Brock emphatically denies. Brock said the company bullied her into admitting she did something wrong.
A current Wells Fargo employee who works in Brock's branch vouched for her version of events. "That's really scary when you're with a big corporation like this and HR doesn't have your back," said the current employee, who wished to remain anonymous so as not to get fired as well.
At least she wasn't fired for also being tardy.
Brock is hoping her story forces meaningful change at Wells Fargo. "You lose if you do complain and you lose if you don't. What does a powerless employee do?" Brock said.

* * *
CNN also spoke to Ken Springer, a former FBI agent who runs a firm that offers a whistleblower hotline service, was alarmed by the allegations made by former Wells Fargo employees.  "That's retaliation. It's a big problem -- and a perfect example of what shouldn't happen," Springer said. "It looks like there's been a terrible breakdown of checks and balances at Wells Fargo."
In response to CNNMoney's report, a Wells Fargo spokeswoman said: "We do not tolerate retaliation against team members who report their concerns in good faith." She emphasized that employees are encouraged to immediately report unethical behavior to their manager, HR representative or 24-hour ethics line.
Alas, the problem is not with employees using the ethics line. It's what management does right after, and if this report is accurate, as a probe will likely confirm or deny, then John Stump's days as CEO of the bank are numbered.

http://www.zerohedge.com/news/2016-09-22/dramatic-twist-wells-fargo-said-retaliate-fire-whistleblowers-who-exposed-banks-ille