Wells Fargo’s High Pressure Sales Culture
On November 30, 2015 financial news publications reported that The Office of the Comptroller of the Currency and the San Francisco Federal Reserve were each probing the bank’s sales culture. The regulators want to know if the bank has pushed its employees too hard to meet sales quotas and not done enough to prevent questionable behavior. The probes, which haven’t been previously reported, follow a lawsuit filed in May by the Los Angeles City Attorney that cast an unflattering light on a core growth strategy that helped Wells Fargo become the country’s most valuable bank with a market capitalization above $280 billion. The lawsuit alleges the bank pressured its retail employees to commit fraudulent acts, including opening accounts for people that don’t exist and charging customers for products without permission.
On May 5, 2015 Los Angeles City Attorney Mike Feuer announced the filing of a lawsuit against Wells Fargo for allegedly opening unauthorized customer accounts. The lawsuit, filed by City Atty. Mike Feuer, alleged that the bank’s high-pressure sales culture set unrealistic quotas, spurring employees to engage in fraudulent conduct to keep their jobs and boost the company’s profits.
“In its push for growth, Wells Fargo often elevated its profits over the legal rights of its customers,” Feuer said in announcing the suit.
On December 21, 2013 the Los Angeles Times covered the sales pressure topic in an article titled “Wells Fargo’s pressure-cooker sales culture comes at a cost.” According to the report Regional bosses required hourly conferences on her Florida branch’s progress toward daily quotas for opening accounts and selling customers extras such as overdraft protection. Employees who lagged behind had to stay late and work weekends to meet goals. Then came the threats: Anyone falling short after two months would be fired.
Wells Fargo & Co. is the nation’s leader in selling add-on services to its customers. The giant San Francisco bank brags in earnings reports of its prowess in “cross-selling” financial products such as checking and savings accounts, credit cards, mortgages and wealth management. In addition to generating fees and profits, those services keep customers tied to the bank and less likely to jump to competitors. But that success has come at a cost. The relentless pressure to sell has battered employee morale and led to ethical breaches, customer complaints and labor lawsuits, a Times investigation has found.
To meet quotas, employees have opened unneeded accounts for customers, ordered credit cards without customers’ permission and forged client signatures on paperwork. Some employees begged family members to open ghost accounts.