Wells Fargo to End Product Sales Goals After Accounts Scandal
Joe Raedle/Getty Images(SAN FRANCISCO) — Days after being fined $185 million by government regulators for allegedly illegal banking practices, Wells Fargo announced Tuesday that it would be ending its controversial employee sales goals.
Wells Fargo, which said last week that it regrets and takes responsibility “for any instances where customers may have received a product that they did not request,” said that the goals would no longer be imposed on employees in its retail banking business as of Jan. 1, 2017.
According to the Los Angeles city attorney, employees were opening and funding accounts without customers’ permission or knowledge in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program.”
The Consumer Financial Protection Bureau (CFPB), a federal watchdog agency, said the bank imposed the goals on its staff because it “sought to distinguish itself in the marketplace as a leader in ‘cross-selling’ banking products and services to its existing customers.”
Wells Fargo has neither admitted nor denied any wrongdoing.
When asked by ABC News why the goals program was not ending immediately, Wells Fargo spokesperson Richele Messick replied, “We understand the details matter, and it’s important we get them right. We will be thoughtfully working through them over the next several months, in consultation with our team members and an independent consultant before finalizing, while ensuring our team members receive fair compensation through the transition.”
Wells Fargo CEO John Stumpf said in a statement that the goals were being eliminated “because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers.”
He continued, “For the past several years, we have significantly strengthened our training programs, controls and oversight and have evolved our model to ensure we are rewarding deeper relationships and providing excellent customer service.”
The announcement comes days after federal authorities alleged widespread misconduct at the bank.
According to the CFPB, bank “employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers,” which allowed the bank to rack up millions of dollars in fees. Some 5,300 employees were fired between May 2011 and July 2015 for the practice.
Wells Fargo officials told ABC News that the company set aside $5 million for restitution payments and have already paid out $2.6 million to affected customers.
Wells Fargo spokeswoman Aimee Worsley told ABC News that the bank believes it has identified and refunded all affected customers, though it encourages customers who think they may have been affected to come forward.
As for the firings, a Wells Fargo spokesperson said, “The actions we have taken with respect to team members and managers reflect our commitment to monitoring and addressing any inappropriate sales conduct. On an annual basis, more than 100,000 team members worked in our stores, and the number terminated represents about one percent of this workforce over the five year period.”
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