Wells Fargo: Why This Bang Isn’t For Your Buck | Kendrick Williams

 

     Hi Spartans! It’s great to be writing all of you again in this turbulent November. In this edition of the MOSAIC blog, I will be talking about the recent scandal that happened with Wells Fargo. This article is pertinent to the perilous fight of social justice, because this will be discussing the economic side of the struggle.   


The issue:

     Wells Fargo is currently under fire by both the media and the government for creating over 2 million phony accounts. Federal regulators stated that Wells Fargo had created millions of false unauthorized bank and credit card accounts. Even though this practice has been going on since 2011, Wells Fargo customers were completely unaware of the false accounts. . These fake accounts allowed the bank to “earn” unwarranted fees and as a result, Wells Fargo employees had boosted their sales and acquired more money.  

Mad Money - Season 10

Wells Fargo CEO

     Wells Fargo had later stated that they have fired 5,300 employees over the last couple years and claims that employees went as far as to create fake PIN numbers and email addresses. The scandal however, continues. Bank employees opened over 1.5 million accounts without were most likely not authorized.  Then employees moved funds from a customer’s existing account and transferred them into newly created ones. This left unsuspecting customers  getting charged with overdraft fees and insufficient funds; this is due to the fact that there wasn’t enough money in their original accounts.


The complex consequences and implications:

     Wells Fargo has currently received the largest penalty from the CFPB (Consumer Financial Protection Bureau) since their finding in 2011. Wells Fargo has agreed to pay $185 million in fines and $5 million to refund customers.

      However this issue goes beyond a bank doing something that is wrong or malicious. The majority of the workers who made these accounts were exploited. Many of these workers were given unreasonable and ludicrous quotas that they were forced to meet. According to La Crosse Tribune, an employee named Jeremy was threatened by his manager after reporting suspicious activity by fellow workers. He eventually quit, but realized that no other banks were willing to hire him. The reason being is because apparently Wells Fargo had written on his Form U5 (employee report used by banks) that he had opened unauthorized accounts instead of his fellow co-workers.

     Jeremy, unfortunately was not the only one whose life was tragically affected. Those who were hurt the most were the ones who gave into the shady practices in order to meet their quotas. They had to sacrifice their integrity-and sometimes their mental health. The New York Times published stories of several former employees who had experienced severe stress because of what their managers required them to do. A woman from the branch in Hudson, Wisconsin had stated that the pressure to coerce and deceive customers was so great that she began drinking hand sanitizer to calm her nerves. A teller in Illinois had stated that the stress was so great that there were days where they went into the bathroom crying and even left work one day to go to the ER because they believed they were having a heart attack. Another teller developed shingles due to the stress(La Crosse Tribune).

     Obviously, the workers were not the only ones negatively affected by this. People who made legal accounts with the bank, or were customers to the bank were deeply affected as well. Employees were routinely encouraged to target Mexican immigrants who speak little English and who may have not had a SSN. Older adults with memory problems were also affected because they too could be easily taken advantage of.

     College students opening their first bank account were targeted as well. This is due to the fact that they haven’t had experience with banks and could easily be taken advantage of. A former Wells Fargo employee, Kevin Pham used the analogy “lions hunting zebras” to describe the predatory actions of the bank. Since Wells Fargo does not require a social security number to open a bank account, they are completely able to create new fake accounts without the knowledge of the customer. Many customers were then hit with overdraft fees that they were unable to pay because they had no access to their accounts because of said overdraft fees. Thus the negative cycle continues.


In conclusion:

     Unfortunately, this is simply another example of aggressive capitalism at its finest. This incident is a classic example of the worker being exploited. While the CEO may be hit with a fine, at the end of the day it’s both the worker and the victimized consumer who are truly going to be affected by this. The people that were fired were those who needed this job to feed their families and take care of themselves, only to be exploited by their place of employment. The customers that signed up for an account with Wells Fargo trusted that their money would be handled efficiently only to be targeted and financially attacked for something they did not do. I stress that this topic is a social justice issue because it affected people who were unable to defend themselves, whether financially or because they may have not even had a SSN. This practice is disgusting and a violation of people’s rights and trust.

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     The exploitation of the worker is nothing new. Companies and corporations besides Wells Fargo still exploit the common worker today. Labor unions had to be created throughout history just to ensure the basic rights of the common worker. The labor movement is something that took nearly 200 years to complete the basic labor unions that we have today. The fight for reasonable hours, livable wages, and to stop child labor has been extremely drawn out. What people forget is the fact that these injustices are still in practice today. However it is not all doom and gloom. You as students can still play your part! You can participate in local politics to make sure that minimum wage workers are receiving a livable wage. You can boycott businesses and banks such as Wells Fargo and let them know that their practices are unacceptable. Remember, that change in corporations and policy starts with you.

     Thanks for reading this edition of the MOSAIC blog! -Kendrick

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