Wells Fargo Scam Is Ugly Look Inside Big Banks

Wells Fargo bank got fined big time for widespread
corruption and hijinks, including opening
bank accounts with fees for customers who did
not ask for the accounts or want them.  

Maybe we should be putting our money under mattresses after all and avoiding banks, given the news about Wells Fargo this week.

Wells Fargo Bank is paying  $185 million in fines to various agencies for opening up millions of phony accounts for unwitting customers.

This wasn't just a few bad apples at Wells Fargo doing this. About 5,300 employees have been sacked for doing this, which means it was part of the bank's culture for doing this.

It looks like the trouble started when Wells Fargo brass instituted, shall we say, aggressive sales targets for its employees.

So aggressive that most of them figured they'd never make it to their goals. So they created fake email addresses to sign up customers for online banking services. Apparently, there were about 1.5 million - yes million - such accounts opened.

The emails were fake, but the customers were real. And these customers did not know they were being signed up. Or would be subjected to fees and such that would help make Wells Fargo big, fat, rich and happy. (Wells Fargo will have to repay these customers fees they paid for their unwitting accounts.)

About $100 million of the settlement went to the Consumer Financial Protection Bureau, Elizabeth Warren's favorite consumer protection agency which was created half a decade ago.

"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears the bank did not monitor the program carefully," said CFPB Director Richard Cordway, as NBC news quoted.

I'm glad Wells Fargo is being called on their misdeeds, but as is usually the case when big banks or big businesses are up to no good, the top brass that condoned it are totally getting away with it.

It looks like the 5,300 or so people who were fired were pretty low level people. Maybe they deserved to be fired. But with that many people involved, Wells Fargo must have had a culture in which they did bad things to make profits.

Company culture usually comes down from the top. So why aren't the executives who had to know about this and did nothing still collecting nice big salaries at Wells Fargo?

It's not just envy of the fat cats that are getting away with this. We are all victims of this weird money making system.

As Douglas Rushkoff noted on CNN:

".......We are watching what we might call 'extreme capitalism' at work. Banks don't make money by creating value; they make money by extracting funds from anyone who wants to build a business or even just make transactions."

Rushkoff went on to explain that when the economy was growing vigorously, shareholders in banks were happy because the banks were making money through business loans and general commerce.

In the past decade, things have been slower, so to keep shareholders happy with every rising profits, banks like Wells Fargo try to make more money by issuing more credit cards with high fees and new loans with high origination costs.

So we're screwed. Because banks aren't really creating anything or helping anybody. They're just finding creative ways to transfer more wealth away from most of us, and concentrate it in their pockets.

I don't know if I agree with Rushkoff in the following or not, but his idea is intriguing:

"The only real solution here is for banks, like any business, not be required to grow. Banks, particularly savings banks, are more like utilities than businesses. With their monopoly power on the ability to issue currency, they are in a unique role to enable business of every other kind. This makes them at least as responsible to the public good as their shareholders.

By seeking to extract a higher percentage of our economic activity to pay for their financial services, they don't help anyone. Rather than promoting business, they serve as a drag."

Many conservatives and business types hate the CFPB, the consumer protection agency that is collecting fines from Wells Fargo and want to abolish it.

It's the agency I noted Elizabeth Warren loves.

The fines show that CFPB can help rein in the excesses of the banking industry.  Paying $185 million isn't a big deal for a behemoth like Wells Fargo. But the publicity sullies its reputation. The CFPB basically shamed Wells Fargo into behaving.

Sometimes a little public shaming is the best way to make people - and businesses behave.

If that doesn't work, maybe we should all withdraw our money and stow it under mattresses, I don't know.

Franklin Graham Hates, But We All Love Instant Karma

Franklin Graham just can't seem to
find a bank that suits his tastes.  

When I'm bored, I sometimes idly go through YouTube videos, and every so often I'm drawn to instant karma video compilations.

Those are the ones where somebody does something wrong or stupid, and pays the price almost immediately.

The video at the bottom of this post isn't a compilation, but it is a delicious example of instant karma.

Franklin Graham, the evangelical Christianist son of Billy Graham was really, really upset with Wells Fargo Bank.

No, he wasn't mad at any financial shenanigans Wells Fargo may or may not have done. He didn't like a certain television ad from the bank.

The ad showed a pleasant same sex couple learning sign language so they could adopt a cute deaf girl, and Wells Fargo would be there to help the newly formed family through the financial leap they would have to make to become whole.

Awww. So sweet!

But Franklin Graham would have none of it! Wells Fargo is shoving the horrible gay agenda down our throats! An OUTRAGE!!!!! Family Values!!!!!!

So in a fit of anger at Wells Fargo, he withdrew his assets from Wells Fargo and put them in another bank that had better family values, supposedly.

Rachel Maddow tells the whole story much better than I, so let's allow her explain to us how things went for Franklin Graham and his banking experiences:

Dear Wells Fargo: If You're Going To Demand Guy Pays His Bill, Make Sure He Owes You

Back in November, Dominic Maier of North Carolina started getting calls from Wells Fargo Bank demanding he start making his mortgage payments again. He owed them, he ought to pay.

Wells Fargo is being sued by a North Carolina man
because the bank has been too lazy or stupid, apparently,
to stop calling him about a mortgage he doesn't have.  

There's only one problem: Maier has no mortgage with Wells Fargo and has never done business with the bank, according to the Charlotte Observer. 

OK, that happens. Mistakes happen. No big deal. Somebody at the bank probably keyed in the wrong number during data entry, and mistakenly put in Maier's phone number. Easy to fix, right?

Not so, it seems when you're dealing with one of these huge banks. In a case unfortunately familiar to many, it seems once somebody puts your phone number in the system at these places, nobody is willing to get rid of it.

So Maier's cell phone kept ringing and ringing for months with Wells Fargo demanding he pay the mortgage. They kept asking for a man Maier never heard of. He asked Wells Fargo to stop calling. He put his phone on the "Do Not Call" list.

Still, the phone kept ringing. Predictably, he's suing.

Why, then, did the bank let this go that far? They could have easily investigated, figured out they were screwing up, and gone after the right person.  Instead, Wells Fargo is getting sued, again.

According to the Observer:

"This is not the first time Wells Fargo has been accused of repeated illegal phone calls. Well agreed to pay $17 million in 2012 to resolve a class action lawsuit claiming people received unwanted calls on their cell phones, causing them to incur charges.

The bank also pledged that it had set up a system to ensure people only received calls on their cell phones if they actively gave the bank permission to use the numbers."

Or not, apparently.

As is typical in these cases, the Charlotte Observer tried to get a comment from Wells Fargo, but were unsuccessful. Kind of a "f**k you from Well Fargo as they are apparently arrogant enough to figure they can do what they want with impunity.

Even if they screw up.

I hope Maier's lawsuit is successful. If somebody at Wells Fargo was too lazy to fix incorrect information and let a database error continually torture the guy with robocalls, they deserve punishment.

I've not been able to find anything on line,  in a cursory search anyway, why it is so difficult to get wrong information about oneself in some corporate database corrected.

This is how bad it gets: I was involved in a minor car accident in 2005. I was to get a small settlement from an insurance company for the damages to the car I incurred in the crash, which was the other driver's fault.

I'm still trying to collect. In 2007, I moved from the address I was at when the crash occured. Here it is seven (!!!) years later, and after repeated entreaties to get them to correct my address in their database, mail is still going to my old address.

So: Are some sectors of corporate American trying to set world records for stupidly or laziness.

You decide.

Read more here: http://www.charlotteobserver.com/2014/02/10/4681657/davidson-man-sues-wells-fargo.html#.UvpdMSgx_FJ#storylink=cpy

Agreeing With Forbes: Dumb Bank President Digs In Heels, Won't Pay Woman For Botched Foreclosure

Forbes just put out a follow-up to the reports I wrote about last month about how a bank in Ohio had a company remove items from a house they were foreclosing on.

Update: Katie Barnett is now suing the First
National Bank of Wellston in Ohio after
bank leaders continue to be stupid.  

The only problem was, they got the wrong house, it wasn't under foreclosure, a woman legitimately owned it, they broke in, took the woman's possessions and threw them out.

Not good.

Despite the negative publicity the bank is facing, the bank president has dug in his heels and won't pay the $18,000 the woman asked for in compensation.

As Forbes points out, it would have been a no brainer for the bank to pay out the $18,000, the whole thing would have gone away and they would have gotten out of this mess cheaply and cleanly.

Stubbornness is never a good thing. Now the bank is facing a lawsuit from the woman, which will surely cost the bank more than the $18,000 it could have paid out. And I'm sure would-be customers of the First National Bank of Wellston are a little leery of putting their money in the bank, given how they behave there.

Forbes writer Rick Ungar ties the stupidity of this bank with the stupidity of bank presidents throughout the world who precipitated the financial mess that began in 2008, one which we're still suffering from.

He writes:

"....if history has taught us anything it is that tone deaf business operators, seemingly without a shred of good judgement, are only cut out for one kind of work--running banks. How else do you explain how bank presidents throughout the world nearly succeeded in completely destroying the world's economy through their stunningly bad judgement and greed?

Yeah, this definitely reinforces my instinct to  to hide what little money I have under the mattress and be done with banks. They scary, those banks.

Anyway, best of luck to the woman suing the First National Bank of Wellston. Maybe she'll end up owning it.

Employer Would Pay Workers Via Debit Card With Lots of Fees To Eat Up Workers' Earnings

A woman in Pennsylvania, Natalie Gunshannon, was just about to start working at a local McDonald's.  She was going to earn just $7.44 an hour, not much more than the $7.25 minimum wage in her area.

In other words, she'd need every penny she took home from her job.

No thanks, says a woman whose employer
wanted to pay her with a fee-laden debit card

Not so fast, said her employer. The boss said she'd only be paid via a Chase Bank debit card.  That maybe would be a good deal for Chase, and probably for the employer,  but not for Natalie, according to Philly.com

There's tons of fees with that debit card. $1.50 for each ATM withdrawal. $5.00 for each over the counter cash withdrawal. It'll cost $1.00 for every balance inquiry, and 75 cents for every online bill payment. And if she lost the card or it got stolen, that would set Natalie back $15.00.

You can see why she objected. By the time she pays all the fees, there's nothing left for frivolous luxuries like food, rent and utilities.

She went to a lawyer, naturally, trying to get this state of affairs overturned.

I hope she's successful. I'd hate to see a trend take root in which we're paid through expensive debit cards that make us pay all these expensive fees just to access what is and should be our money.

I can see all kinds of problems for employees who get paid through debit cards. If the card isn't at the bank or credit union they normally do business with, they'd have to pay fees to transfer to their accounts, or move their banking business to an outfit they might not want to go to.

And you'd probably have to keep a minimum balance in the account through which the debit card is issued. That unnecessarily ties up money in a bank account that is not used. And you'd have to constantly monitor it so you don't pay huge overdrafts.

Of course, if an employee wants to be paid via a debit card and the employee offers it, why not? Some people are willing to pay a few fees for the convenience of holding a debit card. More power to them.

The trick here is to make the debit card an option, but NOT a requirement.

Let's stop nickel and diming low wage employees so the banks can make more money, OK?

I'm all for banks making money, as long as the money they take in is given to them voluntarily.