It seems like the kingdom is crumbling at Wells Fargo. The largest bank in the U.S. is mired in a contentious scandal that involves the company’s employee defrauding millions of customers. There has been nothing like this before, and some 5,300 Wells Fargo employees have been fire for it in the past two years. But was 2014 really the first time Wells Fargo had heard about its ghost account problem?
When Did the Wells Fargo Scandal Really Start?
John Stumpf became the president of Wells Fargo in 2005. In 2007, he became the bank’s chief executive, and in 2010, he became Wells Fargo’s chairman of the board. He seemed to be at the heart of the bank’s success. So when authorities caught wind of the 2 million banking customers that had been defrauded by this company, they immediately turned to Stumpf.
Robert Stumpf was dragged into a congressional hearing, and he told our country’s lawmakers that he didn’t know about the fake account problem until 2013. He blamed the fraudulent ghost accounts on employees and low level managers. However, he was quickly called to task on these claims.
During the hearing, Senator Robert Menendez quoted an e-mail sent to Mr. Stumpf back in 2011. In the e-mail a branch manager from New Milford, New Jersey claimed that employees were being encouraged by management to open ghost accounts and fraudulent credit cards in order to make sales goals. This same manager was later fired when her bank didn’t meet those sales goals, and she wasn’t alone.
More former Wells Fargo employees have stepped up to report the company’s high pressure sales goals. They claim that these goals forced them to open and close accounts without customer approval. But when these employees tried to blow the whistle on these bad practices, they were often fired. These stories have stretched all the way back to 2005.
Right now there are several theories as to how Wells Fargo managed to keep such a large scandal under wraps for so long. However, the bank is facing intense pressure from the government to set things right. Some senators are talking about enacting legislation to allow Wells Fargo victims to sue the bank. Do you think they should? Will former employees that spoke out finally be vindicated? What kind of lawsuits can we expect? The Florida class action lawyers at Colson Hicks Eidson are monitoring the situation, so check back with us on Facebook and Twitter to find out.