WELLS FARGO

In today's episode, we will talk about Wells Fargo Bank and the scandals that hurt its reputation over the years. We will also talk about some of the things they are doing today….right this minute to harm you, the consumer.

In 1852, Wells Fargo began banking activates and quickly evolved from a cross-county express service into one of the biggest banks in the world. To date, Wells Fargo is America's fourth largest bank. The success of the company has been built on a cultural and economic platform that merges deep customer relations and an engaged sales culture. The company's philosophy is to satisfy the customers' needs and help them excel financially, with emphasis on doing things the right way and do it in the customers' interest. The company claims to take its vision very seriously as it is the center of its culture and important to its success and places customers at top priority. However, recent scandals suggest otherwise.

In 2013, Wells Fargo was caught performing cross selling acts, where roughly 30 employees were found to have engaged in fraudulent activity by opening accounts and issuing debit or credit cards to people without their knowledge and consent. The employees were fired, but explained they were pressured into performing the fraudulent actions to meet the daily sale quota. Wells Fargo provided incentives to its employees by dangling additional money on their paychecks if daily sale quotas were met. If the quota was not met, it rolled over into the next day and snow balled from there. After it was all said and done, Wells Fargo was ordered to pay $185 million to settle lawsuits filed by regulations and the city of Los Angeles, California.

In 2018, Wells Fargo was caught in the "auto and mortgage lending" scandal, where the bank agreed to pay $1 billion in settlement to the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency to resolve auto and mortgage violations. After settling the mortgage violations, Wells Fargo agreed to pay an additional $480 million to settle a securities class action lawsuit over cross selling.

In 2020, the U.S. Treasury Department issued a report regarding Wells Fargo's business model. It was discovered that between 2004 and 2009 Wells Fargo engaged in discriminatory activates by charging Black and Latino home buying customers a higher interest rate than White customers. The U.S. Justice Department's Civil Rights Division brought suit against Wells Fargo and it was announced that Wells Fargo would pay $175 million as a settlement for the discrimination suit.

Today Wells Fargo unilaterally enforces the arbitration agreement within the contract between the customer and Wells Fargo. For example, if arbitration would benefit Wells Fargo, Wells Fargo will demand the arbitration clause to be enforced. However, if the arbitration clause is not beneficial to Wells Fargo, Wells Fargo suddenly becomes blind to the clause. Wells Fargo has since targeted a new class of people to pick on, the elderly. Wells Fargo harasses the elderly by suing elder individuals who they know do not have money, or money to garnish, for alleged debts owed.

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WHAT IS NEXT….

In the next episode we will talk about Portfolio Recovery Associates a well-known junk debt buyer.