NEW YORK (AP) – The fraudulent account scandal at Wells Fargo has been making national headlines for months, with no end in sight. If you haven’t kept up with the story since the beginning, it’s worth backing up to get a fuller context for what has happened, and what is still to come.
HOW DID THIS ALL START?
For years, Wells Fargo has been known in banking circles as a having an extremely aggressive sales culture. For years, the bank’s management would say it doesn’t have branches; it has “stores.” And up until this year, Wells Fargo management highlighted its so-called “cross-sell ratio,” which is the number of accounts or other services a Wells Fargo customer typically had at the bank. Wells was aiming for as many as eight financial “products” per household. In context, most big banks aim to have two to three per customer.
Early problems with Wells Fargo’s sales-focused culture date back to at least 2002, according to the board of directors’ report released Monday, much earlier than had been previously reported. The board found a branch in Colorado was issuing debit cards to customers without their consent, and branch management encouraged the behavior.
While the investigation found that Wells fired several employees at that branch, the sales problems did not stop, largely due to the intense sales pressure upper management placed on branch managers and employees to make their numbers each day.