SAN FRANCISCO (CBS SF) — Bank employees say that Wells Fargo Bank isn’t the only bank where employees carry out questionable and predatory sales policies, according to a report released earlier this summer.
Last week, Wells Fargo reached an $185 million settlement package with state and federal regulators over allegations that employees created phony, unauthorized accounts on behalf of customers.
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But a June 2016 report by the National Employment Law Project published statements collected from employees at numerous banks, in addition to Wells Fargo, reporting questionable and possibly abusive sales practices.
The other banks listed in the report include SunTrust, Chase Bank, Bank of America, and U.S. Bank.
The report’s researchers conducted 75 informational interviews with bank workers in 18 U.S. states, noting that the through the interviews “it becomes clear that Wells Fargo is not alone in implementing these policies … their impressions about the dangers of the sales quota incentive systems in place in most big banks are troubling.”
Some bank workers described opening accounts for family members just to make quota numbers.
Last week’s announcement by the federal Consumer Financial Protection Bureau (CFPB) states that, according to the Wells Fargo’s own analysis, its employees opened more than two million deposit and credit card accounts that may not have been authorized. The abusive practices by the bank is estimated to have cost customers over $2.5 million.
The CFPB alleges that the bank, in an effort to boost sales figures, secretly submitted fraudulent credit card applications and opened phony, unauthorized accounts on behalf of some Wells Fargo customers over a five year period.
Wells Fargo’s chairman and chief executive officer John Stumpf subsequently reached out to bank customers on Tuesday.
In an email from Stumpf to Wells Fargo Bank customers, he admits that the San Francisco-based bank acted unacceptably when “some Wells Fargo customers received products and services they did not want or need.”
Stumpf said that Wells Fargo has fully reimbursed customers affected by its actions and that Wells Fargo employees will no longer be compensated based on product sales. A Wells Fargo spokeswoman said the bank will eliminate product sales goals effective January 2017.
But on Monday, members of the U.S. Senate Committee on Banking, Housing and Urban Affairs, including Massachusetts Senator Elizabeth Warren penned a letter to the Senate Committee’s chairman, Richard Shelby, urging him to launch an investigation into how “more than 5,000 employees could bilk customers over the course of five years” and to determine what additional safeguards may be needed to prevent another incident of this magnitude.
The committee members urged Shelby to include testimony from Stumpf in any future investigation.
Hours later, Shelby agreed with them, calling for a Senate Banking Committee hearing on the matter to be held on September 20th.
A 2013 Los Angeles Times investigation revealed some of the alleged abusive practices reported by Wells Fargo employees, which included threatening to fire team members who didn’t meet quotas for opening accounts or who failed to sell customers overdraft protection.
Julie Miller, a member of the Committee For Better Banks, and a former Wells Fargo branch manager herself, said in a statement released Tuesday, “Predatory sales goals are rampant at big banks across the country, and we will keep on working and organizing to make sure Wells Fargo makes good on its word and that other banks follow suit by implementing fair business practices for workers and customers.”
On Wednesday, the Wall Street Journal reported that the U.S. Attorney’s Offices for the Northern District of California and for the Southern District of New York launched an investigation into Wells Fargo’s sales tactics and that prosecutors have issued the bank a subpoena.
A Wells Fargo spokeswoman declined to confirm the bank had been subpoenaed.
SunTrust, Chase Bank, and U.S. Bank officials did not immediately respond to a CBS San Francisco request for comment regarding the practice of compensating retail employees based on product sales.
Bank of America declined to comment.
By Hannah Albarazi – Follow her on Twitter: @hannahalbarazi.