Wells Fargo is far from the lone culprit in pressuring employees to open unneeded new accounts to meet sales goals, former bank workers said in a conference call to reporters on Monday.
Those tactics are at the heart of the fraud unearthed at Wells, where bankers signed up customers for accounts without their approval.
Organized by the Committee for Better Banks — a coalition of bank workers, community and consumer advocacy groups, and labor organizations — the call featured three onetime bank employees who said the unreasonable sales goals and extreme pressure from management led to pushing unnecessary, and at times harmful, services and accounts onto consumers. Two weeks ago, the Consumer Financial Protection Bureau announced a $185 million fine against Wells Fargo, the nation's third largest bank by assets, for such practices.
“At my branch, it was the norm to disregard for the customers’ needs and only focus on the sales,” Cassaundra Plummer, a former teller at TD Bank who left a year ago, said during the call. “My manager pushed me to only talk about the positives of products and to avoid discussing fees and the things that were negative.”
The use of sales goals for employees leading to predatory behavior is a problem that goes beyond the recent issues at Wells Fargo, said Shane Larson, the legislative director at the Communications Workers of America. “This is an industry wide issue and problem,” he said, adding that a June report by the National Employment Law Project, an advocacy group, found similar types of unnecessary and predatory accounts have been opened at Bank of America, J.P. Morgan Chase, and SunTrust.
A TD spokeswoman respectfully disagreed with Plummer's description of the bank's sales culture, saying in an email that the TD takes its "commitment to customers and ethics and integrity seriously." Any behavior that undermines customer trust is inconsistent with that mission." A BofA spokeswoman said she hadn't seen the National Employment Law Project report, but that remarks from CFPB Director Richard Cordray last week "ran counter to this." Her reference was unclear and she did not respond to a request for clarification. Other banks fingered for high-pressure sales did not respond to requests for comment or declined to comment.
Ex-teller Plummer said that, when urging her to enroll customers in new services or accounts, her manager would say things like “you don’t have to tell them all of this, that’s why we give them the paperwork.” When she argued that no one ever reads the paperwork, he replied: “Exactly.”
At Wells Fargo, a former branch manger, Julie Miller, reported she was told to increase sales by more than 35% every year. Khalid Taha, a San Diego-based personal banker who left Wells Fargo in July, reported he had a daily quota to open approximately 10 to 15 personal accounts, two to three other types of accounts, and two to three new credit cards or loans, as well as to find a daily referral for an insurance or mortgage product.
The goals were unreasonable and created a “culture of harassment and fear when we did not meet them,” said Miller, who left Wells Fargo in 2013. She added bankers became so desperate to meet their quotas, they would resort to underhanded schemes.
“Bank workers do not push products on them because they just want to make some extra money for themselves; many bank workers are worried every day that if they do not meet that sales goal, they will be fired,” Plummer said.
One way to beat the system was to “churn” accounts, in which bank employees closed an account and the immediately opened up a new one for the same customer, Miller said. Additionally, bankers would automatically open a debit card account for a customer every time a new checking or savings account was started—without giving the customer a chance to decline. And signing customers up for online banking and credit cards, as part of the account on-boarding process, was another method to add a “new product” to their quota.
In an effort to generate fees, bankers also were encouraged to open a savings account for customers as a way to avoid checking account maintenance fees, Taha said. But customers had to make transfers from their checking account, but with less money in that account, they were more likely to be hit with overdraft fees of $35 per occurrence.
“Instead of helping lower income customers avoid fees, Wells Fargo insisted on selling new products that ended up taking more money out of their pockets,” Taha said.
And executives at Wells Fargo knew what was going on, Miller said, adding she reported employees opening fraudulent accounts as early as 2009, but nothing was ever done about it. “They’ve known about it for years,” Miller said. “But they chose to look the other way.”
To avoid being a victim of these predatory practices, Plummer recommends customers ask lots of questions during the enrollment process. “When a representative is saying he’s going set up a debit card, ask them why, why do I need this?” Plummer said.
At TD Bank, Plummer said the bank told its employees to avoid asking if customers wanted a service like online banking, and to simply inform them the bank was setting it up. Bankers expect consumers to “go with the flow,” she said, and asking questions can stump employees and spark an honest conversation.
It’s also a good idea to establish a fraud alert with credit bureaus to make sure nothing is erroneously set up in your name. Additionally, make sure you understand every product and service you’re offered and keep track of what you’re signing.
“Many times, they’re just offering it because they have to, not because you need it or because it’s something that will benefit you,” Plummer said.