Wells Fargo’s Very Bad Day
Sales targets and compensation incentives (and perhaps a little bit of a breakdown in training) spurred Wells Fargo employees to covertly open fake accounts and fund them by transferring funds from consumers' authorized accounts, which would often result in fees or other charges. More than two million accounts may have been opened this way. The fallout includes full restitution, $185 million in fines, and more than 5,300 fired employees for engaging in this practice. While Wells Fargo is noted for being overly aggressive in its cross selling, this might be a good time for all financial institutions to take a look at whether there are unintended consequences for their sales incentive programs. [9/9/16]
