By: Soondos Mulla-Ossman ~Staff Writer~
Wells Fargo, one of the biggest US banking industries has recently come under fire after it was found guilty of fraud charges.
Analysts claim that Wells Fargo has started leading banks down the path of massive labor market destruction. Over 5,300 employees have already been fired from Wells Fargo for creating 2 million fake credit card accounts without customer permission.
After settling allegations, the bank was forced to redistribute more than $185 million to federal and state regulators. The scandal has caused an industry-wide fear of investigations in other banks and a clampdown on employee practices.
Wells Fargo employees reported being forced to meet certain quotas, which pushed them into creating the fraudulent accounts. Some even said employees were not allowed to go home until they met their quotas, and were not paid for overtime.
“This will accelerate the trend from physical delivery to virtual delivery of banking services, with tens of thousands of job losses in retail banking, as the industry transitions from bricks to clicks,” Bank Analyst Mike Mayo told the New York Post.
Since the scandal occurred during physical, in-person exchanges with the bank, there is a rising belief that machines and comperterization of processes will solidify the peace with regulators.
One woman reported having a surprise $30,000 line of credit after a single, brief interaction with the banking company when it momentarily owned the mortgage on the house she was selling.
Another digital marketer from Minneapolis opened an account for his daughter’s Girl Scout troop through Wells Fargo. Two years later, when taking out a mortgage, he discovered a credit card in his name. He initially thought his wife had secretly created the credit card account until he was surprised to find out it was a fraud on the bank’s part.
These customers, among others scammed by the fake account generation, are frustrated about having to prove to Wells Fargo that they were not the ones who created them. Two ex-Wells Fargo bankers have already filed the first of possibly many cases against the company.
Wells Fargo is one of the nation’s top financial employers and the No.1 home loan lender, with more than 200,000 employees nationwide.