Wells Fargo, fraudulent accounts and a surprising lack of oversight

Wells Fargo Chief Executive Officer John Stumpf testifies on Capitol Hill in Washington, Tuesday, Sept. 20, 2016, before Senate Banking Committee. Stumpf was called before the committee for betraying customers' trust in a scandal over allegations that employees opened millions of unauthorized accounts to meet aggressive sales targets. (Susan Walsh/AP)

It seems that not a day goes by without some big company ending up in the news. This past month it seems that this company was Wells Fargo.

Wells Fargo has managed to allow its employees to open over 2 million fake accounts using information from its existing customers. Since then Wells Fargo has reached a $185 million settlement as a penalty as well as paying $5 million to customers. Wells Fargo is also facing an investigation from the United States House Financial Services Committee and their CEO has been interrogated lawmakers publicly. Wells Fargo has a duty as a bank to provide safe banking to its customers. By not committing enough oversight on its employees, Wells Fargo has failed in its duty as a bank and in its oath to customers.

From 2009 to 2013, over thousands of employees managed to open over 2 million fake accounts using account information from customers. They set up fake pin numbers and caused many issues with customers’ accounts. Money was pulled from existing accounts to create new accounts and many people had their credit hurt. The executive board decided to fire all 5,300 employees involved with the fraudulent accounts. The board seemed to think that it was only a group of renegade employees. Yet those 5,300 employees make up 2 percent of the company’s workforce and they tell a different story. The employees say that Wells Fargo set high quotas for employees and encouraged bankers to cross-sell products to bank customers. Wells Fargo claims that this technique would help better secure the financial safety and stability of its customers.

The Wells Fargo CEO John Stumpf has denied any wrongdoing of the incident and apologized, but said he did not know anything about it until the Los Angeles Times story broke the case in 2013. Stumpf and the board have decided to remove the incentives attached to setting up accounts. Stumpf also stands to take away millions in bonuses at the end of the year.

All of these decisions that Stumpf and the Wells Fargo board of directors have decided to make comes way too late. Wells Fargo has betrayed the sacred trust that citizens and customers put into their banks.

Before we get too far into this, I want to make one thing clear. I understand that banks are a business. Banks have a duty to make money for their stockholders and even for their customers. After all, the ability of a bank to generate money for its stockholders helps convince people whether or not they are going to end up putting their money into the bank.

However, when people choose to put their money into a bank, they expect their information to be kept safe, for their financial information to be kept secure. Wells Fargo failed to do that. Instead it let itself be led by greed. It forced its employees to meet an impossible standard and did not stop once to think that something might go wrong. And somehow even after 5,300 employees were found to be connected to the fraudulent account making, the board had the gall to say that it didn’t know anything about what had happened. There is no way that a company can fire 5,300 employees without knowing far in advance what was happening.

A lot of people believe that bankers are the worst kind of people. People believe that bankers are untrustworthy and greedy. People believe that bankers are corrupt and only believe in making money. But bankers and all people involved in finance are supposed to be, at the bare minimum, ethical. Wells Fargo ignored that and managed to convince the rest of the world that they are as bad as everyone thinks. They have failed in their duties and failed the public.  


Amar Batra is a senior staff photographer and an opinion's staff columnist for The Daily Campus. He can be reached via email amar.batra@uconn.edu.