Wells Fargo nixes product goals for retail bankers in wake of fraud scheme

Wells Fargo & Co. is eliminating all product sales goals for retail bankers in a move aimed at calming concerns following revelations that thousands of employees allegedly created millions of fake accounts.

The bank’s change in policy, which will go into effect on Jan. 1, is meant to reassure congressional lawmakers and its customers that Wells is taking action to improve practices after getting hit with a $185 million fine after employees reportedly opened more than 2 million unauthorized credit and deposit accounts.

{mosads}“We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers,” said CEO John Stumpf in a statement.

“We believe this decision is both good for our customers and good for our business” he said.

The Senate Banking Committee has asked Stumpf to testify on the bank’s alleged misconduct at a hearing on Sept. 20.

In the statement, Stumpf highlighted that the bank has been strengthening training programs, controls and oversight during the past several years.

“The elimination of product sales goals represents another step to reinforce our service culture, helps ensure that nothing gets in the way of our ability to achieve our mission and is consistent with our commitment to providing a great place to work,” he said. 

The bank, which has fired more than 5,3000 employees who were involved in the fraud scheme over the past five years, has said it deeply regrets what happened and is seeking to repair damaged relationships and regain trust. 

News of the bank’s problems brought a backlash of concern from Capitol Hill on Monday. 

Five Senate Banking panel Democrats called for hearings to investigate the bank’s practices and others have asked the Consumer Financial Protection Bureau (CFPB) to examine how many seniors were affected. 

The CFPB announced the fine last week, including a $100 million penalty paid to the CFPB’s civil penalty fund — the largest fine ever levied by the regulator.  

More than 5,000 Wells employees secretly set up more than 2 million deposit and credit card accounts that weren’t authorized by consumers, according to the bank’s own analysis.

That includes about 1.5 million deposit accounts and 565,000 credit card accounts.

The Wells employees opened unauthorized deposit accounts for existing customers and transferred funds from their authorized accounts, submitted credit card applications, enrolled customers in online banking services and email notifications and ordered and activated debit cards.

Wells Fargo said it has refunded $2.6 million to affected customers and has set aside $5 million to cover the costs.