Have you heard the latest about Wells Fargo? Well, in 2011 Wells Fargo was forced to pay $85 million in fines for selling higher interest rate mortgages to customers who qualified for lower rates and falsifying loan applications in the process.
Not 5 years later, Well Fargo finds itself faced with a strikingly similar scandal to the tune of $185 million in fines for opening deposit accounts and transferring funds without customers’ consent. This calls for deeper investigations, increased regulation of the banking industry and questions around how such unethical behaviour might become the norm of acceptable behaviour across an entire organization. What the employees were doing was opening a new account, moving a small amount of money in, closing the account and put it back. Repeat. Get a bonus.”
It sounds so simple that you can imagine a small group of unethical employees being involved but it turns out but is spread across thousands of people. Over the last several years, Wells Fargo terminated a whopping 5,300 employees who were found to be connected to the scandal.
Earlier this year, Carrie Tolstedt, the Wells Fargo executive in charge of the unit that’s now at the center of this current scandal, announced that she was exiting the company. And guess what, she will be walking away from the bank later this year with $124.6 million in stock, options, and restricted Wells Fargo shares, not to mention the $7.3 million bonus she received last year. It has been stated that she is responsible for the pressure cooker sales culture and employees were regularly expected to force “unneeded and unwanted” products on customers to satisfy sales goals.
I hope you don’t have shares in Wells Fargo!
Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.
To contact Colleen, please fill out the form on www.mortgagesbycolleen.ca or call 416-459-2406