The moral bankruptcy at the heart of Wells Fargo’s sales fraud


make it rain, bank teller

The news fallout from Wells Fargo continues. We’re now in the phase where employees are beginning to describe their ground floor perspective:

“They warned us about this type of behavior and said, ‘You must report it,’ but the reality was that people had to meet their goals,” said Khalid Taha, a former Wells Fargo personal banker who resigned in July. “They needed a paycheck.”


One particular branch in the Los Angeles area was held up as a model of employees’ cranking out huge numbers of new accounts. Years before the scandal came to light, retail bankers from other parts of the country used to visit the branch to divine the secret sauce, according to a former bank executive.

The branch was eventually hit with a wave of firings over phony accounts.

Former employees have scoffed at the bank’s suggestions that the sham accounts were primarily the result of bad decisions by unethical workers.

In an online discussion on Reddit this week, former Wells employees swapped grim stories about the dichotomy between their ethics training — where they were formally told not to do anything inappropriate — and the on-the-job reality of a relentless push to meet sales goals that many considered unrealistic.

The on-the-job reality was pervasive enough that at some locations branch managers were weary of fielding customer complaints, likening the subsequent write-ups to issuing tickets for “jaywalking.” We might learn more when Wells Fargo CEO John Stumpf testifies over the matter before a Senate committee on Tuesday, but the type of atmosphere portrayed here isn’t a batch of bad apples that just happens to be statistically significant because of the size of the company. This was an obvious characteristic of a sales program the company actively promoted. So either the company is so large that they can’t recognize sizable actions within it’s domain (entirely possible), or they knew very well what was occurring and quietly attempted to reduce it in order to avoid the type of regulatory attention that they ended up receiving.

To be fair to Wells Fargo their business strategy isn’t unique. Former employees from other banks are speaking out as well, in what one advocacy group describes as an industry-wide practice of “[e]xtremely unreasonable sales goals and collection quotas” for ground-level workers. The number of institutions that have been recently fined or investigated for fraudulent activities born from aggressive sales is not small, as there is every incentive to thread the needle here between fraud and legal deception. These banking and financing companies need to turn a profit in an age of depressed demand, and they have a workforce with the most basic of leveraged weaknesses—the need to eat:

Garza, the former JPMorgan Chase banker, has recounted his experiences with lax oversight in various media accounts and in a June presentation before members of Congress. At the time he worked for the banking giant in Dallas, he said in an interview he made just $11 an hour. The bonus he could claim for reaching his monthly goals for new accounts helped keep him off public assistance.

“You make a determination, a hard one, and say do I take this ID and meet my monthly quotas and put food on the table?” Garza said.

To reuse a phrase from my previous post, this is how the exploited becomes exploiter. Not because the money is so good or the ceiling for success is so high but because people need to eat and pay the bills and have somewhere safe to live. I’ve worked at a firm that took advantage of this reality. They knew, as easily as Wells Fargo, that it’s a very simple decision to force entry-level workers to perform like their boom or bust salespeople because the alternative is far worse for the employee than it is for the boss. It’s a defining feature of our political economy, this dichotomy of workplace power relations where one party faces starvation while the other confronts a bad quarterly statement, and it’s utterly morally bankrupt.


One response to “The moral bankruptcy at the heart of Wells Fargo’s sales fraud

  1. Pingback: It’s not enough | Punditocracy·

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