On the latest Planet Money podcast (MP3), a former San Francisco Wells Fargo banker describes the bullying and coercion she faced from senior management while working at the bank's head office, and how the bank forced her out when she blew the whistle on fraud and then blacklisted her with other banks, forcing her out of the sector altogether.
"Ashley" was 30 when she went to work at Wells Fargo, her first serious job. When she started, she was ordered to sell 8 "products" every day, and was told that every Wells Fargo customer should have a minimum of 8 accounts (at one point, this was raised to 20 accounts per day). She was ordered to call friends and family members and beg them to open accounts. There was no respite: even after the branch she worked at was robbed and the captured thief shit himself and faked a heart-attack, she was ordered to remain at her desk and "dial for dollars" while the police crammed into the closed branch and the stench of human feces filled the room.
Ashley worked at the bank for five years, enduring gruelling "coaching sessions" when she failed to meet sales quotas, returning to her desk to throw up from the stress. As she discovered elderly and vulnerable bank customers who'd been put into delinquency because her desperate colleagues had fraudulently opened accounts in their names, she began to telephone the bank's ethics hotline, only to find herself forced out of her job.
Ashley was no longer able to get work in the banking sector. Planet Money discovered that this was because Wells Fargo had put a black mark on a secret database shared among American banks, fraudulently stating that she had been fired because she was "unable to perform her duties."
Planet Money spoke to other former Wells Fargo bankers who'd been hired in their late 20s and early 30s and treated in near-identical ways, revealing that this was a systemic problem across the bank -- they described their workplaces as "boiler rooms."
Ashley worked in the same building as CEO John Strumpf, who made $200,000,000 in bonuses and stock gains linked to the fraud (Ashley was paid about $30,000 a year). Strumpf told Congress that the bank's executive had no idea that this was going on and never encouraged it. He parked his car in the alley behind Ashley's desk and walked past her routinely on his way to and from his office (she used to hold the door for him).
Ex-Wells Fargo employees like Ashley are suing Wells Fargo for $2.6B, alleging they were coerced into fraud and fired for refusing to steal from Wells Fargo customers. When I first saw that number, I assumed it was a bit of lawyerly showmanship intended to grab headlines. But Ashley's story -- and the stories of other ex-bankers that Planet Money spoke to -- puts the number into a different light: if Wells Fargo churned through thousands of low-paid employees, all but forcing them to commit fraud, then blackballing those who refused or blew the whistle, that number feels, if anything, too low.
The Wells Fargo fraud was only discovered because union organizers who were targeting the sector made a stink about it. When that story broke, I experienced some cognitive dissonance: bankers are the sort of people you expect to be breaking unions, not joining them. But the workplace conditions of Wells Fargo -- where refusing to commit fraud meant being barred from working in the sector ever again -- are breathtakingly corrupt. As a reminder the organizers who broke the Wells Fargo story say they discovered the same frauds at all the other major US banks. Watch this space.
After the scandal broke, Wells Fargo's CEO John Stumpf was called to Capitol Hill to testify. He told the senators that the bank's upper management wasn't responsible for the giant scam. He said it was just a bunch of bad apples working at bank branches. Mostly low-level employees.
One of the low-level employees was watching her former boss testify. And she couldn't believe it. This wasn't Wells Fargo's culture? Upper management had nothing to do with it? She knew the company in branches across the country had pushed and pushed young bankers until they broke the rules. Even the law.
Episode 728: The Wells Fargo Hustle [Planet Money]
(Image: Striking members of the New York Cloak Joint Board carry placards against racketeering July 29, 1952, Kheel Center, CC-BY)