U.S. based bank Wells Fargo stops with its contentious sales strategy and associated targets. Thousands of the banks employees found a ‘loophole’ to meet the targets. Staff members opened over two million fake accounts or added uninvited services to existing customer accounts. Wells Fargo management told staff members a regular household used six financial services that should be raised to eight.
Wells Fargo changed its sales strategy after the bank was fined for the amount of 185 million USD by the authorities for fraudulent sales transactions and had to settle for 5 million USD in compensation for duped customers.
The bank had to fire 5.300 of its staff members and policy makers announced an investigation. Rating agency Moody’s states that the scandal possibly has a negative impact on the credit rating of Wells Fargo.
Authorities placed the bank under a magnifier. Chairman and CEO John Strumpf is appointed to testify in congress. Politicians in Washington D.C. question the position of Strumpf, in particular after Strumpf tried to blame the low paid bank staff for the fraud. Strumpf returns over 41 million USD in bonusses due to the scandal.
Aside from Strumpf, Carrie Tolstedt, who is reponsible for consumer banking at Wells Fargo, left the bank early. Tolstedt would have retired end of the year after a 27 year employment term. She renounced her bonus of 19 million USD in stocks.