Posted on 02/04/2021 6:30:14 PM PST by bitt
They called me one day and told me they saw unusual account activity. During a 30 minute conversation that found nothing unusual, they sort of forgot to tell me that they cancelled my atm card. Then they refused to send me a new one where I was located. (I was away from home for several weeks).
I asked if they really wanted to destroy a 26 year banking relationship.
I guess they did.
Wells Fargo Agrees to Pay $3 Billion to Resolve Criminal and Civil Investigations into Sales Practices without Customer Authorization
justice.gov | February 21, 2020 | DOJ / FR Posted on 2/21/2020, 6:11:04 PM by ransomnote
$3 Billion Payment Result of Deferred Prosecution Agreement in Criminal Matter, Settlement of Civil Claims under FIRREA and Resolution of SEC Proceedings
Wells Fargo & Company and its subsidiary, Wells Fargo Bank, N.A., have agreed to pay $3 billion to resolve their potential criminal and civil liability stemming from a practice between 2002 and 2016 of pressuring employees to meet unrealistic sales goals that led thousands of employees to provide millions of accounts or products to customers under false pretenses or without consent, often by creating false records or misusing customers’ identities, the Department of Justice announced today.
As part of the agreements with the United States Attorney’s Offices for the Central District of California and the Western District of North Carolina, the Commercial Litigation Branch of the Civil Division, and the Securities and Exchange Commission, Wells Fargo admitted that it collected millions of dollars in fees and interest to which the Company was not entitled, harmed the credit ratings of certain customers, and unlawfully misused customers’ sensitive personal information, including customers’ means of identification.
“When companies cheat to compete, they harm customers and other competitors,” said Deputy Assistant Attorney General Michael D. Granston of the Department of Justice’s Civil Division. “This settlement holds Wells Fargo accountable for tolerating fraudulent conduct that is remarkable both for its duration and scope, and for its blatant disregard of customer’s private information. The Civil Division will continue to use all available tools to protect the American public from fraud and abuse, including misconduct by or against their financial institutions.”
“Our settlement with Wells Fargo, and the $3 billion monetary penalty imposed on the bank, go far beyond ‘the cost of doing business.’ They are appropriate given the staggering size, scope and duration of Wells Fargo’s illicit conduct, which spanned well over a decade,” said U.S. Attorney Andrew Murray for the Western District of North Carolina. “When a reputable institution like Wells Fargo caves to the pernicious forces of greed, and puts its own interests ahead of those of the customers it claims to serve, my office will not sit idle.
Today’s announcement should serve as a stark reminder that no institution is too big, too powerful, or too well-known to be held accountable and face enforcement action for its wrongdoings.”
“This case illustrates a complete failure of leadership at multiple levels within the Bank. Simply put, Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way,” said U.S. Attorney Nick Hanna for the Central District of California. “We are hopeful that this $3 billion penalty, along with the personnel and structural changes at the Bank, will ensure that such conduct will not reoccur.”
“Our office is committed to bringing to justice those who deliberately falsify and fabricate bank records in order to deceive regulators and the public,” said Inspector General Mark Bialek of the Board of Governors of the Federal Reserve System and Bureau of Consumer Financial Protection. “I commend our agent and our law enforcement partners for their hard work and persistence that led to today’s announcement.”
“Today’s multi-billion-dollar penalty holds Wells Fargo accountable for its unlawful sales practices and pressure tactics in which it deceived millions of clients, thus causing substantial hardship for the very individuals who placed their trust in the institution,” said Inspector General Jay N. Lerner Federal Deposit Insurance Corporation.
“The FDIC Office of Inspector General is committed to working with our law enforcement partners in order to investigate such financial crimes that harm customers and investors, and undermine the integrity of the banking sector.”
The criminal investigation into false bank records and identity theft is being resolved with a deferred prosecution agreement in which Wells Fargo will not be prosecuted during the three-year term of the agreement if it abides by certain conditions, including continuing to cooperate with further government investigations.
Wells Fargo also entered a civil settlement agreement under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) based on Wells Fargo’s creation of false bank records. FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate criminal offenses, including false bank records. Wells Fargo also agreed to the SEC instituting a cease-and-desist proceeding finding violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
The $3 billion payment resolves all three matters, and includes a $500 million civil penalty to be distributed by the SEC to investors.
The 16-page statement of facts accompanying the deferred prosecution agreement and civil settlement agreement outlines a course of conduct over 15 years at Well Fargo’s Community Bank, which was then the largest operating segment of Wells Fargo, consistently generating more than half of the company’s revenue.
The statement of facts outlines top Community Bank leaders’ knowledge of the conduct. As part of the statement of facts, Wells Fargo admitted the following:
Beginning in 1998, Wells Fargo increased its focus on sales volume and reliance on annual sales growth. A core part of this sales model was the “cross-sell strategy” to sell existing customers additional financial products. It was “the foundation of our business model,” according to Wells Fargo.
In its 2012 Vision and Values statement, Wells Fargo stated: “We start with what the customer needs – not with what we want to sell them.”
But, in contrast to Wells Fargo’s public statements and disclosures about needs-based selling, the Community Bank implemented a volume-based sales model in which employees were directed and pressured to sell large volumes of products to existing customers, often with little regard to actual customer need or expected use.
The Community Bank’s onerous sales goals and accompanying management pressure led thousands of its employees to engage in unlawful conduct – including fraud, identity theft and the falsification of bank records – and unethical practices to sell product of no or little value to the customer.
Many of these practices were referred to within Wells Fargo as “gaming.”
Gaming strategies varied widely, but included using existing customers’ identities – without their consent – to open checking and savings, debit card, credit card, bill pay and global remittance accounts.
From 2002 to 2016, gaming practices included forging customer signatures to open accounts without authorization, creating PINs to activate unauthorized debit cards, moving money from millions of customer accounts to unauthorized accounts in a practice known internally as “simulated funding,” opening credit cards and bill pay products without authorization, altering customers’ true contact information to prevent customers from learning of unauthorized accounts and prevent Wells Fargo employees from reaching customers to conduct customer satisfaction surveys, and encouraging customers to open accounts they neither wanted or needed.
The top managers of the Community Bank were aware of the unlawful and unethical gaming practices as early as 2002, and they knew that the conduct was increasing due to onerous sales goals and pressure from management to meet these goals. One internal investigator in 2004 called the problem a “growing plague.”
The following year, another internal investigator said the problem was “spiraling out of control.”
Even after senior managers in the Community Bank directly called into question the implementation of the cross-sell strategy, Community Bank senior leadership refused to alter the sales model, which contained unrealistic sales goals and a focus on low-quality secondary accounts.
Despite knowledge of the illegal sales practices, Community Bank senior leadership failed to take sufficient action to prevent and reduce the incidence of such practices. Senior leadership of the Community Bank minimized the problems to Wells Fargo management and its board of directors, by casting the problem as driven by individual misconduct instead of the sales model itself. Community Bank senior leadership viewed negative sales quality and integrity as a necessary byproduct of the increased sales and as merely the cost of doing business.
* * *
The government’s decision to enter into the deferred prosecution agreement and civil settlement took into account a number of factors, including Wells Fargo’s extensive cooperation and substantial assistance with the government’s investigations; Wells Fargo’s admission of wrongdoing; its continued cooperation in the investigations; its prior settlements in a series of regulatory and civil actions; and remedial actions, including significant changes in Wells Fargo’s management and its board of directors, an enhanced compliance program, and significant work to identify and compensate customers who may have been victims. The deferred prosecution agreement will be in effect for three years.
The global settlement also reflects coordination between the Department of Justice and the SEC to ensure a resolution that appropriately addresses the severity of the defendants’ conduct while avoiding the imposition of fines and penalties that are unnecessarily duplicative.
The deferred prosecution agreement was handled by the United States Attorney’s Offices in Los Angeles and Charlotte, with investigative support from the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation - Office of Inspector General, the Federal Housing Finance Agency - Office of Inspector General, the Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, and the United States Postal Inspection Service.
The civil settlement agreement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office in Los Angeles.
Attachment(s):
Download Wells Fargo Exhibit A Statement of Facts
Topic(s):
Financial Fraud
Component(s):
Civil Division
USAO - California, Central
USAO - North Carolina, Western
Press Release Number:
20-219
10 SEPT 2019
Sue. The. Bastards.
A few million people should short BOA using options to drive the stock down before the next quarterly Wall Street call.
Thank you for that good link.
Of course all banks did it... They’re required to... Anyone that is FDIC insured does.
Just wondering if you are keeping up with this stuff.
He would have if he had the technology.
“There was a lesson here folks.If your going to do something you probably shouldn’t do don’t use Credit Cards or ATM’s.”
Rarely do I ever use my debit card. Ever. If you go to a grocery store, practice by paying cash. Big Bro knows you withdraw money. But what are you using it for? Let them guess..
pierrem15 wrote:
“A few million people should short BOA using options to drive the stock down before the next quarterly Wall Street call.
Send that idea to the GameStop guys...
The way they have recently ramped up the looting of citizens and smashing of liberty, they may well know more than they are telling us.
Boy, with all that data, I bet those G-Men were able to really go to town on those BLM rioters in Portland and Seattle!
Kind of restores your faith in Big Government, doesn't it?
Regards,
Yeah, I really expected them to show more backbone, and to stand up for their customers!
/ sarcasm
Regards,
Saw this on Tucker... Appalling!
Perfect graphic!
Tell you what you oughtta do:
Dress up real nice and go down to your local BOA, say that you want to open up a couple of big accounts.
Diddle with them for at least an hour... Have the branch manager come in to explain things to you. Make it apparent that you are accustomed to being given the V.I.P. treatment.
Mention your good friends in Davos. Occasionally whisper in German to a confederate whom you have brought along.
Then, near the end, ask if BOA would ever cooperate with the Feds and filter through their database containing info on millions of customers, in the hope of finding a couple who had, e.g., recently stayed at a hotel in D.C. or donated to the Trump campaign.
You know the rest...
Regards,
Wonder if the FBI will ask for the same info for the Seattle, Portland, Minneapolis, Los Angeles, Detroit . . .
Astute observation...
Any government in such a potential near-extinction situation could not be trusted... Particularly the communist regime now in power...
Since 2004, some part my stockpiling of essentials has been driven by this possibility...
Since it will pass over the east coast, An impact could be a possible way in which the communists might be kicked out of the WH and all of DC...
The Fourth Amendment to the Constitution would seem to apply here:
“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”
If the government “asked BOA”, but produced no warrant, BOA was under no obligation to violate the privacy of its customers and security of the papers and personal information of its customers. Unfortunately the cost for an individual to sue BOA and the federal government would be astronomical. In today’s world finding a competent lawyer would be hard enough. Then the government and BOA will drag out discovery for years. Getting an unbiased judge is another obstacle. Finally any citizen who isn’t independently wealthy will see his job lost, harassment by the IRS, and other pressures.
Assume he finds the money, and is willing to go through living hell for the next ten years. He appeals to the Supreme Court, likely increased in size and dominated by leftists. They simply refuse to hear the case, or even worse “interpret” the words to state “voluntary” compliance to such warrant less requests by government are ok.
The average citizen cannot afford the legal process today, much less expect the judiciary to protect his constitutional rights. Hence freedom is dead.
WT* over? Look at the picture carefully.
Asterisk mine
The Feebs have some splainin' to do.
Note: NSFW.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.