October 14, 2025 • 58 mins
Wells Fargo is one of the most popular retail banks in the United States, and its gigantic customer base uses it for everything from savings accounts to loans and more. However, a few years bank the bank came under fire for perpetuating a conspiracy all its own -- more and more customers found they had multiple accounts and lines of credit opened without their consent, and further investigation found that was just the beginning of the problem. Tune in to learn more about this real-life banking conspiracy, how it was discovered and the consequences (or lack thereof).
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Episode Transcript
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Speaker 1 (00:00):
Folks, welcome back. We've got a classic episode for you.
This one is proudly not brought to you by Wells Fargo.
Speaker 2 (00:06):
Unless it is.
Speaker 1 (00:08):
Unless it is, and they.
Speaker 3 (00:09):
Haven't heard this.
Speaker 1 (00:11):
The story of one of the most popular retail banks
in the United States definitely gave a couple of US
Acrossroads come to Jesus moment where we got into the story.
But back in twenty twenty, we, like so many other people,
learned that Wells Fargo had an entire side business doing
some highly illegal grifts.
Speaker 3 (00:32):
And when we did this exploration, I vowed to take
my business elsewhere, and I'm still with Wells Fargo to
this day. Out of sheer laziness.
Speaker 2 (00:40):
First National Bank of Atlanta into Wakovia, into Wells Fargo exactly.
Speaker 1 (00:46):
And a lot of people ended up in Wells Fargo because,
like I saying, they just got snapped up by an
increasingly gigantic Leviathan of finance. And I missed Wakovia because
the name sounded like a sneetz.
Speaker 3 (00:59):
It was nice to say, you're gonna call you.
Speaker 1 (01:03):
These boks were made for COVID and that's just what anyway. Yeah,
we'll get to this classic episode afterword from our sponsors.
Speaker 4 (01:11):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn this stuff they don't want you to know. A
production of Iheartrading.
Speaker 2 (01:35):
Hello, Welcome back to the show. My name is Matt,
my name is Noah.
Speaker 1 (01:40):
They call me Ben. We are joined as always with
our super producer Paul. Mission control decands, most importantly, you
are you. You are here, and that makes this stuff
they don't want you to know. Quick check in. I
think this is the first time any of us have
spoken today, or at least Matt, you and Knowle, it's
(02:00):
the first time spoken with you. Paul and I go
way back today. How's it going, guys, It's.
Speaker 2 (02:05):
Going really well. Having all kinds of interesting phone calls
with people that I've never met until today. So this
is just a day of new things.
Speaker 3 (02:14):
Really anything to write home about. Not yet, No, I
see very cryptic.
Speaker 1 (02:22):
Matt. I like it.
Speaker 3 (02:23):
I'm intrigued. I too have had some unusual phone calls
with people that I have never met and may never meet.
Who knows if I'll ever even leave my house again.
But I'd like to think that there is a future
where I will be able to get on an airplane
once again, because that's fun. It's fun to go other places.
(02:43):
We'll see what happens.
Speaker 1 (02:45):
Yeah, I'm actually doing some doing some runs later today
to you know, if people are immunocompromise, it's a tremendously
bad idea for them to leave their house, even if
they're in an area like George where the local leadership
is attempting to open up various businesses and institutions. So
(03:06):
I'm going to go do some no contact drop offs.
If you are immunocompromised, please please, please, still don't go outside,
even if everything else is open. It's just not worth it.
Speaker 3 (03:17):
Yeah. Guy, I know in Brooklyn who got COVID nineteen.
It was a mild case, but he just got the
go ahead from his doctor to leave the house. And
he pos his birthday today. Actually, yeah, so happy birthday.
I'm not gonna say his name because he may not
want people to know that he had the thing, but
happy birthday to you, my friend, and really glad to
(03:40):
see you get out. And he had he had a
mask on, was keeping it super safe. But yeah, it's
gotta be tough, you know, just like having that level
of isolation, especially if someone lives by themselves.
Speaker 1 (03:52):
And speaking of crises, it's safe to say that our
current financial system, like many individuals in the world today,
is in a state of crisis. This is yet another
crisis for the financial system. By the way, I think,
by the time people reach the age of let's say,
(04:14):
I don't know, arbitrarily eighteen, they've already experienced several huge
behamoths of financial crisis. But individuals in countries around the
world right now are being told to shore up their
finances and they're being chastised for quote unquote poor financial planning,
while at the same time, billion dollar corporations are getting
(04:36):
bailed out left, right, over and under. Some people would
call this the way of the world. Some would call
it a series of conspiracies. Yet the world of finance
and conspiracy, they're inextricably intertwined. You know, you could even
say the concept of money itself is a conspiracy. As
a matter of fact, we have said that on previous episodes,
(04:58):
and I stick to my guns on banks have been
accused of multitudes of financial crimes, many conspiracies, and even
at times assisting with things like government overthrows or cup d'tas.
This is not to say that all banks are all
bad right for now, they are a necessity. Billions and
billions of people rely on banks in some way, and
(05:21):
in turn, those banks rely on those billions of customers.
That's the official story. If this were a mural or
a portrait, that's the background, that's where that's happening. But
there's more to the episode, of course, and to get
you to the point of today's episode, we have to
first briefly explain how banks work. It sounds super simple,
(05:44):
but there are a few misconceptions we need to bust
and there's some things that we'll discuss that might surprise you,
but don't take our word for it. Here are the facts.
Speaker 2 (05:54):
Yes, the bank itself, the institution, the thing that we
all rely on, really is one big trust fall. A
bank is really only a thing, an idea concept that
works as long as everyone believes it does what it
does right. It's a lot like currency in general. If
you don't believe that thing in your pocket perhaps or
(06:16):
laying in a drawer somewhere, that weird paper like substance
that has some images on it, If you don't believe
that thing is worth what it's worth, then it is
in a thing.
Speaker 3 (06:25):
Yeah, it's like fairies. Like if you don't believe in
tinker Bell, then she dies, you know.
Speaker 2 (06:29):
Kind of yes, So let's talk about what we all
believe a bank is and does. Officially, it's a quote
institution that deals in money, and it substitutes and provides
other financial services. So really think about it this way.
Banks take in deposits money and then they loan out
money and drive a profit from the difference in the
(06:52):
interest rates that are paid and charged respectively. So when
you think about that, like how much money they can
make by lending money out and then charging interest on
that money they're lending. But the big thing here to
remember is that in order to have money to lend out,
they have to be taking money in.
Speaker 3 (07:08):
But make no mistake, I mean, the bank isn't really
built for you. I mean it's a business. It's designed
to make money for the shareholders. So it's primary function
really isn't to be some sort of you know, safe
haven for your money. That's almost like an afterthought. You're
really just feeding the machine with your money and then
(07:31):
they're investing it as they see fit. Essentially, that's an
oversimplified view of it. But yeah, you deposit money. When
you do, your money goes into this massive pool along
with everybody else's money, and then your account is credited
with the amount of your deposit, so you're able to
draw on that account to pay bills and write checks,
et cetera. Who still writes checks. I had to get
(07:52):
a single check the other day because I had to
pay off my car and I had to go to
the bank to get one check. It's the weirdest thing.
But yeah, that amounts to deducted from your account balance,
and you can, you know, theoretically earn interest on that balance. Uh,
and that can actually be added back to your account.
This is all kind of one oh one banking basics here.
Speaker 1 (08:14):
Yeah, I called it day one stuff because that's the
primary misconception that I want to bust here. The primary
function of a bank is not you as an individual customer.
And although it may sound basic, it may sound like
day one stuff, it is a huge misconception that is
very distressingly common. The bank's primary purpose, as far as
(08:37):
you are concerned, is just to take money from you,
whether that's money you deposit, whether that's money that you
pay on a loan in principle or in interest where banks,
you know, want to make more more revenue. That's what
that's what you are. You know, that's what you are,
and you can We've talked about this in previous episodes.
(08:58):
If you'd like to learn more about the nuts and
bolts of this the banking system, especially here in the US,
do check out our earlier explorations of the FED the
Federal Reserve for more details. That's the gist. The amount
of interest that you get on your checking account or
your savings account. In the big picture, it's peanuts. It's
(09:19):
better than nothing, but it's peanuts. Bank customers matter the
absolute most when we take out loans and pay interest
on those, or in a panic situation, in a worst
case scenario for a bank, when every customer of a
bank wants their money back in cash all at once,
because you see, yeah, you see, the banks won't have it.
(09:40):
They just won't have it.
Speaker 3 (09:41):
I mean, it's essentially I mean not to be de
reductionist about it, but it reminds me of a Ponzi scheme.
The whole thing is like a paying Peter to robbing
from Peter to pay Paul scenario. Although it's all under
the guise of being legitimate. I mean, if you go
back and say I want my money, shouldn't you be
able to get your mind? But if everyone does it
at the same time, then it's not going to work out.
(10:03):
And yet we trust in this system because it's somehow
backed by some kind of promise by the government or
the FDIC or what have you.
Speaker 1 (10:10):
Yeah, and that's what's happening in Russia right now as
we record this, which is just for peak behind the
curtain right at the very end of April twenty twenty.
So this can happen again countries around the world. Has
happened in the US as well. So you might be
asking yourself rightly, Okay, guys, if this is all true,
and we assure you it is, then why am I,
(10:34):
as an individual checking account holder important at all? Right?
If I don't have a loan, if I don't have
a mortgage, why do I matter? Well there are two reasons. First,
as we established earlier, banks are using your money, specifically
your money sometimes even if you're not working with the bank,
which is weird but true. And second, and this is
(10:55):
just basic sales psychology. Once people choose a bank, they
tend to stick with that bank. So if you're the
average person with a checking account at one bank, you
are far far more likely to have a credit card
account with them, a savings account or alone with them
as well. And these accounts all have differing terms, and
depending on a ton of mitigating factors, one person may
(11:18):
have a much better deal than another. Right, some people
have credit cards with maybe what like nine percent interests,
and other people have credit cards with like twenty five
point nine to nine percent interests. There's a lot in play,
and we should add a customer with a line of
credit and a line of savings. From the bank's perspective,
you are far more profitable than an ordinary Jenny or
(11:40):
Jack who just has a checking account.
Speaker 3 (11:42):
Yeah, it's true. And it's also people often are a
little bit lazy, and they might not shop around for
a better rate, or you know, they might get that
zero interest, you know, introductory deal and then forget to
pay it off when the rate gets jacked up to
like twenty percent or some ungodly And honestly, I'm not
(12:02):
to that degree, but I'm one of those in terms
of laziness. I have had a bank account that has
changed hands like three times throughout the course of my
my financial life, and I'm just kind of stuck with
whatever it ended up being, you know, just because it's
a pain in the butt to like close your bank
account and start over and redo all your cards and
(12:24):
all that stuff. And I think the banks are kind
of a they're sort of capitalizing on that, right, people
being stuck in a routine and being a one stop
shop and just being easier to stick with what they
know than to go maybe shop for a better deal.
Speaker 2 (12:38):
I yes, and you know, I'm in actually a pretty
similar situation. Tool. And the last time I had to
go into the bank, I noticed something, and it was
that the person I was speaking with it wasn't just
a teller, it was, you know, a banker. You know,
if you, if anyone has ever had that experience where
you want.
Speaker 1 (12:55):
One you go in the office or on a desk.
Speaker 2 (12:58):
Yeah, exactly. And what I was attempting to do was
open a new account with them, because I've been an
account holder for a while and I wanted to open
a new specialized checking account. And what happened was, rather
than just having that conversation opening that account, having that
one transaction, they were attempting to get me to open
(13:19):
a credit card with them. They were attempting to get
me to change over a mortgage to them and do
all these other things and insurance. Yes, and it's something
that I'm assuming is pretty common throughout the banking world.
Speaker 1 (13:33):
Yes.
Speaker 3 (13:33):
Selling.
Speaker 1 (13:34):
Yeah, the concept is so common that there is a
name for it in the industry. It's called cross selling.
It started out as an internal term, but now, for
reasons that will will become abundantly clear in a few minutes,
it is a term that is in the public sphere.
Success for okay, so Wells Fargo or Wacovia or you know,
(13:58):
five Thirds Bank or whatever, any bank that you used,
any bank that you walk into and have a checking
account with and so on. Those are what's called retail banks.
And for a long time, success at retail banks was
measured by how successful the bankers or even the people
on the phone were at cross selling. And that's encouraging
(14:21):
a customer, Remember our Jenny or Jack with one checking
account to open up multiple other accounts to be fair.
This also happens if you have like a credit card
with Bank of America or something, they're like, hey, make
a savings account with us right ever thought of buying
a boat, et cetera. This idea is an invention credited
to a single man. His name is Richard Kovikchik's he
(14:45):
was a Wells Fargo CEO. He's a guy who reputedly
came up with the idea of cross selling during his
time as a CEO at Northwest Corporation. And we've got
a thing from an interview he had in nineteen ninety eight,
I think with Vanity Fair maybe where he summarizes his
(15:06):
idea and it sounds normal now, but when he said it,
it was pretty innovative.
Speaker 3 (15:13):
Yeah, he really kind of changed the lingo of banking.
He started referring to branch employees or the idea of tellers.
I called them salespeople, and consumers referred to them as
customers rather than clients. And another one that I've heard
that I have no doubt sprang from the same kind
(15:35):
of shift was all of the various products that the
bank can sell you, you know, like these credit cards are products.
All of these up cells or these cross sells you're
talking about are referred to as products, which I find
very strange. You know, it's such a non tangible thing.
Like insurance being a product.
Speaker 2 (15:54):
Well, and just from personal experience, there are so many
different kinds of products that these retail banks offer customers
that seem extremely similar. But there's like seven different kinds
of checking account, there's like six different kinds of savings
accounts and all this other stuff. And it's also that
you can offer exactly what the customer needs or the Yeah,
(16:17):
the customer or not the client.
Speaker 1 (16:20):
I don't think it's pre convenience.
Speaker 3 (16:22):
No, it's definitely not. You guys. It reminds me of
when I got my car loan a handful of years
ago and like they made me, you know, this this
offer of this interest rate and it was like higher
than I thought I should be offered because I have
really good credit. And then I was gonna walk away,
and they said, oh ho ho, wait a minute, now,
we didn't know you. If we just told us you
wanted it low, that we would have I'm like, what, like,
(16:46):
just offer me the rate that I am do based
on my score, Like why are you trying to nickel
and die me. It's the same thing. And this was
through a small community bank, but it was all like,
you know, at the hands of these kind of sleazy
car dealers. Not not to malign all card dealer. I'm
sure many of you are great, most of you even,
but this one in particular, I felt very kind of
bent over a bearl a little bit, and I got
(17:07):
them down to where I wanted to be, but I
felt kind of ichy. The whole thing made me feel
like I didn't want to do business with them anymore.
Speaker 1 (17:14):
Yeah, yeah, it's gonna The anecdote I always think of
is like, imagine you walk into a fast food restaurant
and you order, I don't know, a cheeseburger, and they're like,
all right, do you want poop on your cheeseburger? Why?
Why is that part of the conversation now, I don't
even want the burger cheez.
Speaker 2 (17:35):
Well, look, we got to get rid of all this
poop somehow, and you know, if you'll accept it on
your burger, then you know we're getting rid of it
in that way and you're getting what you want.
Speaker 1 (17:44):
We'll give you a loyalty card, how about an Amazon
gift card? So that's I mean, it's true. No, you know,
I had to I had to interject a little like
I think it could be advertised as convenience this plethora
of options I'm using over correctly. Yeah, but I think
what it's I think what it's really meant to do
(18:05):
is to make things inconvenient, to make it more difficult
to find the right deal. The options are are cane
by design, you know, just like a life insurance or
just like a A lot of medical insurance or health
insurance plans function that way. That's just a that's just
a byproduct of private industry trying to maximize profit because
(18:29):
a lot of people won't do the research. Well's fargo.
It was really really good at this. They were considered
for some time and not insignificant amount of time, the
best cross seller in the retail banking game. But there
was one problem, I know, just one.
Speaker 2 (18:47):
Maybe you know why there's a problem then, yes, why
because imagine if you're the best seller at something, now,
imagine your numbers are on a really nice trajectory upwards. Now,
in order for you to maintain profitability and to increase
year over year, like increase, you have to continue your
(19:09):
track rate as the best seller, right, and then over achieve.
Speaker 3 (19:13):
Not to mention, you want to get that set of
steak knives, you know, and the coffee is for closers.
So you want to get coffee, you don't want to
get cut off. You need that stuff to sell, right.
Speaker 1 (19:24):
It's the unsustainable, unsustainable growth model, exponential growth model of
capitalism year over year, and it applies to a lot
of industries. So I mean, that's what I was going
to say. I said there was one problem, but really
there were millions of problems. You see Wells Fargo and
other banks. We're getting a lot of new accounts, getting
(19:46):
a lot of new customers, cross selling. But these accounts,
it turns out, were made up out of thin air.
What are we talking about. We'll tell you after we'd
from our sponsor. Here's where it gets crazy. So let's
(20:08):
say you don't have enough accounts, Well, well, why don't
you make them up? As early as twenty eleven, still
like nine years ago, easily, outfits like the Wall Street
Journal started noting this enormous internal pressure that Wells Fargo
was exerting on everybody from the bank manager level on down.
(20:31):
They were supposed to measure up to these incredibly difficult
sales quotas, these cross selling quotas. These were cartoonishly implausible.
Vanity Fair in fact noted that several of these goals
were proven to be literally mathematically impossible to achieve. That's nuts. Like,
(20:54):
even if you pitched everything to everyone, every single customer
got every single offer possible and they all said yes,
you still wouldn't meet the quota at some points.
Speaker 3 (21:07):
That's crazy.
Speaker 2 (21:08):
That's crazy, It really is so so. Imagine that you
are let's say a bank manager or one of the
main salespersons at you know, bankers, or just salesperson at
the bank. Imagine that you are aware that you are
expected to sell x number of new accounts or open
(21:30):
x number of new accounts, and you only you know,
you see, like you literally physically see x minus fifty
people a day, right, so you know that there's no
way you're going to do that, There's no possible way.
What do you do when you know your job is
on the line. That number is directly related to how
(21:52):
well you do, if you can get a raise at
some point, if you can keep your job even well.
They started doing something that they weren't supposed to do,
and that's just opening new accounts that would count towards
their quota but wouldn't actually be tied to somebody who
wanted an account.
Speaker 3 (22:12):
Wait a minute, Wait a minute, isn't that called fraud?
Speaker 1 (22:16):
Ding ding ding? Yes, it is. Indeed there was. There's
a guy named Dennis Hambeck who once upon a time
was an employee at Wells Fargo. Now this guy had
extensive banking experience, was his career. He got into banking
as a young cat before all these massive consolidations, right
(22:39):
before the financial whales starts swallowing the other smaller financial fish,
and well, whales are mammals. But you get it, you
know what I'm talking about. So he said this in
a quote, just to hammer home that point that you made, Matt,
about how intense this pressure was. He said, every morning
we had a conference call all with the managers. You
(23:01):
were supposed to tell them how you were going to
make your sales goal for the day, and if you didn't,
you had to call them back in the afternoon explain
how you why you didn't make it, and how you
were going to fix it. It was really tense. Uh
So you can imagine that, you know, there's a little
problematic if we're being.
Speaker 3 (23:21):
A terrible place to work, as almost as though it
would drive you to do something untoward m exactly.
Speaker 1 (23:31):
Nol it's it's like, think about this, like, imagine you
go to uh, let's say your your local hardware store,
and you're planning to buy a leaf blower and a
screwdriver Phillips flathead, it doesn't matter for this example, but whatever,
whichever one you like most, you're supposed to get them.
You pay for them, and you're gonna get them delivered. Later,
(23:52):
you learned that the store did not just sell you
a leaf blower and your favorite screwdriver. They also sold
you a chainsaw, around two cases of blue power Aid,
maybe some outdated lamp fixtures, and they threw it along
gnome and they charged you in some way for all
of it. And now imagine that delivery took months or
years and you didn't find out about it until much later.
(24:15):
This sounds silly, right, It's like an arrested development sitcom
esque thing, but that's pretty much what happened in this scenario.
In real life, this happened to people at Wells Fargo.
Speaker 2 (24:28):
Yes, Ben, the the routers and Poweraid example feels like
it's out there, but we assure you it is not
that different. So let's imagine one of those individual employees
knowing they have to make this quota. So let's say
they're talking to you on the phone as a customer
and they convince you to take out a large loan,
(24:50):
let's say, let's say a ten thousand dollars loan. They
convince you to do that with the caveat that they're
going to immediately repay you five thousand dollars or like
pay off five thousand dollars of that loan. So really
you're only taking out a five thousand dollars loan, but
on paper, and according to the bank, they're going to
get credit for taking out a ten thousand dollars loan,
(25:11):
and it's just a way for them to sustain themselves
within the banking infrastructure. And that is most certainly an
unsustainable thing.
Speaker 1 (25:20):
Yeah, yeah, it's I like the point you made about
Ponzi's scheme. No, that was occurring to me as well,
because it very much is an unsustainable growth situation. Things
start to crack. In two thousand and five, there's a
customer named Bill Moore and he goes to Dennis Hanbeck,
who he mentioned earlier, and he's he's befuddled, and he's
(25:43):
kind of indignant because he says, hey, Dennis, I see
that I have a checking account and a savings account,
and they like date back to five years ago. I
didn't ask for them, and I don't want them. And
(26:05):
so Hambick, being a stand up guy, is on the case.
Speaker 3 (26:09):
Yeah, I think it's interesting. I mean, really is doing
some pretty serious, serious slewth thing. He looks into it
and discovers that the banker who opened those accounts, as
you typically need to have with opening an account, there
was a driver's license number that was entered as more
WF zero zero zero zero zero, which sounds like a
(26:32):
really wonky like vanity license plate if you ask me.
And to boot. The date of issuance was January first,
two thousand, which was a holiday when the Department of
Licensing of Washington State would have been closed. And Hamback
is not letting this go. He kind of is getting
(26:54):
the brush off for management. So Hamback retires. I think
he was just kind of fed up because he you know,
he was the one that was looking into this, and
he was the one that was finding some very fishy evidence,
and he wanted to avoid being fired for not resorting
(27:14):
to these kinds of fraudulent activities in order to make
those unrealistic expectations, and Ben I wanted to mention, I mean,
so it's not like management specifically instructed employees to do
this to break the law, but more or less implied that,
you know, put up or shut up, like you're out
(27:35):
if you don't meet these expectations. It's sort of like
there was a big cheating scandal in Georgia public schools
years ago, and it was because of unrealistic expectations for
standardized tests. And while you know, obviously you can't condone
the cheating, you understand why some of these teachers might
have done that because they felt pressured to meet these standards.
But again, it's not like they're superiors instructed them to cheat.
(27:58):
Is that similar here, benus were making these decisions on
their own.
Speaker 1 (28:02):
Yeah, they were heavily incentivized to make those decisions. I think.
I think that's a great comparisonal because the thing about
it is it would be illegal for the banks and
the executors to come out and say, look, make up
these accounts and break the law. As a matter of fact,
you know, we said Hamback refused to play the game.
(28:24):
It's interesting in official company literature, this kind of unethical
behavior is referred to literally as gaming, and so they
can't They won't ever compromise themselves by saying, you know,
go break numerous financial laws. They'll just say, hey, why
aren't you meeting these sales quotas your job is in jeopardy,
(28:47):
And usually that's all the incentive people need.
Speaker 3 (28:49):
But to your point, Ben, they almost laid out how
to do it by having it in their company literature
as a thing you should not do, and even give
it a name. I think that's pretty interesting and teachable here.
Speaker 1 (29:04):
Yeah. Yeah, it's just like the frozen grape concentrate from
the days of prohibition that said do not do the
following steps because it will result in fermentation and make
wine number one. You know, it's exactly like that. And
to quote to quote Yates from the Second Coming, the
(29:24):
Center could not hold right, or to paraphrase them, this
was unsustainable and very very soon things would fall apart.
Will explore the fallout which continues today. After a word
from our sponsors.
Speaker 3 (29:45):
And we're back talking more about banking, because it's it's
not as boring as it might seem. You guys, there's
some pretty shady stuff going on at Wells Fargo their
own analysis that they did between twenty eleven twenty fifteen
found that it's employees that opened more than one point
(30:06):
five million deposit accounts and more than five hundred and
sixty five thousand credit card accounts that may or may
not have actually been real. Uh, but then we can't forget.
And this is always the point that I but when
I thought back on this story, these weren't like made
up identities. These were like duplicate accounts of real people.
(30:27):
How did they think this was? That they were gonna
get away with this for very long? It just seems
like such a desperate move, which clearly it was.
Speaker 2 (30:34):
It feels like one of those things that you get
away with until you can't, and you you sustain what
you've got and how everything is going until it all
falls apart. It's building that house of cards situation where
you know, at some point the bill comes due, but
it's not going to be today or tomorrow.
Speaker 3 (30:52):
Probably.
Speaker 1 (30:52):
It's like the boiler Room. You remember that film? Mm hmm, yeah,
I think I just liked the boiler Room. Oh I'm
that But you're right, So some customers, obviously we're gonna
find out about this because some of those accounts opened
in their names had fees, so they would get they
(31:13):
would be asked to pay these fees on accounts that,
as far as they knew, did not exist. Some customers
even had collections agencies calling them due to these unpaid
fees because again they didn't know that the accounts existed.
They weren't getting notified of the fees. Even the first
(31:33):
time they would find out about one of these fraudulent
accounts is when they were getting shaken down by a
collections agency. So just imagine what that does to your
credit as well. This has lasting financial consequence for people totally.
Speaker 3 (31:48):
And I mean I think that, you know, I'm just
guessing here that Wells Fargo employees were banking on the
fact that, you know, a lot of these fees are
little nickel and dime fees here and there that you
might not even notice. I certainly don't scan through my
bank ledger and try to pick, you know, pick out
every single little fee or whatever. I mean, you know,
I definitely glance at it from time to time, but
I don't go through it with like a fine tooth comb.
(32:10):
And it's such a negligible amount. It's not like you
take a big hit to your bank account and all
of a sudden thake, something's up, right.
Speaker 2 (32:17):
You know what I'm gonna do immediately following this episode,
go through that bank account.
Speaker 1 (32:22):
Yeah, fine, tooth a lot of people while you're there.
Go ahead and check just in general, fellow listeners, go
ahead and check your cell phone bill. See what kind
of service charges have just popped up over time. And definitely,
I'll say it, I'm not get in trouble for this,
but definitely keep an eye on Comcast. They are, you know,
they're they're voted again number one most hated company in
(32:48):
the US. That's not my opinion, that's a fact.
Speaker 3 (32:51):
Yeah.
Speaker 2 (32:52):
Yeah, just whoever your ISP is, really it doesn't matter.
Speaker 3 (32:56):
Just check it.
Speaker 2 (32:56):
Check all those bills, keep.
Speaker 1 (32:58):
An eye on them because those plans change, right, They're
meant to change in ways that you might not be
aware of unless you are paying mindful attention. So this gaming,
as they called it, this unethical behavior, was so ubiquitous
that it even created related kind of terms, slang terms internally.
(33:22):
There's one called pinning, and that meant assigning customers pin
numbers without their knowledge. That's incredibly disturbing because, as you know,
a pin number is supposed to be yours. It's like
it's sacro sanct It's similar to a bank's version of
(33:42):
your Social Security number. No one else is supposed to
know it. But if someone makes up a pin number
that you do not know, that means they can impersonate
you on a Wells Fargo computer and then boom, boom, boom,
they can enroll you in all sorts of quote unquote
products without your no. So boom, Now you've got auto insurance. Boom.
(34:02):
Now you had a Carlan boom, Now you had a
credit card. And this was nuts, because the most mystifying
thing about this still is not even how widespread it
is to me, it's how blatant it was. The LA
City's Attorney Office found that there were one hundred and
ninety three thousand non employee accounts opened between twenty eleven
(34:25):
and twenty fifteen. And get this, the only email name
listed for them was Wellsfargo dot com. This is just
at Wells Fargo dot com.
Speaker 3 (34:35):
Wow.
Speaker 1 (34:36):
Wow, it's not like even not even trying, you know,
it's like not even doing like level one improv. I
bet we could make I bet we could make like
right now, we could make as many fake names as
we wanted. You know, Tad Dorgenson, that's not a real name.
That's still better than Wells Fargo dot com.
Speaker 2 (34:57):
Or you get even if you just put like ceu
u st as in customer and then put a string
of like, you know, numbers and letters or something. It's
that easy, cheeze. But that takes time. And I guess
you had to make so many so quickly age what they.
Speaker 1 (35:15):
Did going to that point of desperation, you know. And
on September eighth, twenty sixteen, Wells Fargo did settle with
some authorities. They paid one hundred and eighty five million
dollars to three institutions, the Consumer Financial Protection Bureau, the
Office of the Comptroller of the Currency, which is a thing,
(35:38):
and the City and County of Los Angeles. They wanted
to settle the charges of a massive fraud. As part
of this agreement, they were able to avoid admitting that
they had done anything wrong.
Speaker 2 (35:53):
Now that sounds familiar. That sounds pretty dang familiar, you know.
Speaker 3 (35:57):
To be fair, they absolutely have plausible deny of ability.
The only thing they were guilty of was having high standards.
Speaker 1 (36:04):
There we go, there we go. Yeah, as you can
tell in a universe to the left of this, the
four of us are are lawyers.
Speaker 2 (36:11):
Yeah, it's true.
Speaker 1 (36:13):
I think we would be good in the courtroom. So
it's weird because they all they did, they did do
one other thing aside from pay one hundred and eighty
five million dollars. They fired. They fired around a thousand employees,
maybe a little more. And these were mostly juniors. They
were fired for gaming. If you think about it, these
(36:33):
were sacrificial goats just sort of meant to be a propitiation.
They were meant to appease the gods of regulation. And
we know what you're all thinking. You know what everybody
is thinking. Hey, one hundred and eighty five million dollars
is a big deal to me. But isn't that chump
change for such a huge bank. The answer is yes.
Speaker 2 (36:56):
It was about three percent, right, three percent of second
quarter profits of that year. So there are four quarters.
One of those quarters had to shape off three percent
in order for them to be Okay, that's crazy.
Speaker 3 (37:10):
It's also way less than some executives have made over
the past five years. Gentlemen, I propose that we join
our forces and start a bank. What do you say,
get out of this podcasting rat race and start ourselves
up a bank. Surely, no, you won't do it.
Speaker 2 (37:33):
I won't do it. My soul shall not allow boys.
Speaker 3 (37:37):
That's fair. I respect that.
Speaker 1 (37:40):
So yeah, but you know I kind of started a bank.
Speaker 3 (37:43):
Yeah yeah, well yeah, the Ben Bank. The Ben Bank
deals exclusively in ben bucks.
Speaker 1 (37:48):
Unencumbered by souls. Yeah, also true.
Speaker 3 (37:52):
But you know, so you then you understand Ben as
the head of the Bend Bank. This is all just
the cost of doing business, my guy, right.
Speaker 1 (38:00):
Yeah, yeah, I want to say, in case this plays
in court later, technically I am not on the executive board.
I am a consultant, so nice try.
Speaker 3 (38:11):
For the record, that was me lapsing into my douchebag
executive voice when I said, my guy, there, I just
had to walk that one back a little bit.
Speaker 1 (38:21):
I like it.
Speaker 3 (38:22):
People say, yeah, I just you know, it has to
be tongue slightly in cheek. But yeah, man, seriously, I
mean this is it was a slap on the wrist
is even putting it uh strongly? You know?
Speaker 1 (38:36):
Right, yeah, that's a great point. I mean a thump
on the ear, you know, yeah, yeah, a finger wag
and a strong sentence using your full name exactly. That's
that's the issue with it, because this was I mean,
this literally is a cost of doing business. They didn't
emit wrong, Douane. They had plausible deniability. In short, this
(39:00):
bank thought they got away with it until that is,
employees like Hamback started coming forward, and there's there was
a list of employees who complained internally, because like any
large institution, there are channels through which you're supposed to
send your complaints. The list of employees who were skized
(39:21):
out by this and complained it stretches back over ten years.
People knew what was up, you know. Like again, it
might sound like we are vilifying Wells Fargo, but we're
talking about the crimes of an institution. Really, we're not
talking about any of the employees in the banking industry.
(39:43):
We're not talking about any of the employees in Wells
Fargo specifically. Right, These people are not the ones who
said make these impossible sales quotas.
Speaker 3 (39:53):
Yeah. So, as of this year twenty twenty, Wells Fargo
has agreed to rebillion in settlements for criminal charges and
a civil action that's stemming from its widespread mistreatment of
its customers in its community bank over a fourteen year period.
(40:15):
Court papers show that prosecutors described the insane environment that Ben.
I mean, honestly, I was responding to when you first
said at the top of the show, you know, checking in,
explain to me why you didn't make it, you know,
justify your actions every single day. I mean, sure, accountability
is one thing, but this was very much like you
(40:36):
described it, Ben in your notes, as a pressure cooker
environment that was kind of created, just absolutely toxic work environment,
right so to very low level employees.
Speaker 1 (40:46):
Yeah, absolutely, this is this is I don't know, We've
got a lot of people in the audience who've worked
in sales jobs or something with commission I don't know
if you guys have ever done that. I have not,
but it feels like a very demanding situation to be
(41:07):
put in, even when there's you know, absolutely no unethical behavior.
Most commissioned sales do not require unethical behavior. But like,
think about the pressure the next time you're in a
brick and mortar store. Think about the pressure and employees
under when they ask you those series of questions and
a purchase like have you ever bought something? And you know,
you just buy one thing you need, like maybe a
(41:28):
cable somewhere, or you're buying some pants or you know,
whatever you want to buy, and then the cashier starts
asking you a series of questions like what's your phone number,
you want to sign up for our credit card, you
want to sign up for a rewards card, and so on.
Speaker 3 (41:43):
Yeah, I always say I'm good, Like when they ask
for my phone number or email. No, I don't ever
want anyone to have that, because there's no reason for it.
They act like it's said, oh so we can better
serve you next time, or have you on my database
and know what you like. I don't know why anyone
would ever give out their information at a brick and
mortar store like that, because you can.
Speaker 2 (42:03):
You can get special perks guys, right, and now we're
family once they have all my info, Look, just give.
Speaker 3 (42:11):
Me a card and punch a hole in it when
I buy a thing, and then give me a free
thing when I've punched enough holes in it. You know,
I'm old school like that. I'm finally that model.
Speaker 2 (42:21):
Yeah, well, so imagine that you are. Again. We keep
trying to put ourselves in the position of the lower
level employees at you know, in an institution like this
when you like, maybe you have experienced a maybe a
quarterly meeting or a meeting with your company where everybody
gets together and they talk about the state of the
(42:41):
company and what's going on, and everything you know is
going up or down or for this reason, for that
other reason, things are going great or terribly. And imagine
you're in one of those meetings and you know that
you your your bank, your local chain of the bank,
and your manager. You guys did meet up to the standards.
(43:01):
But you guys did everything right, and you tried as
hard as you could, and you made some pretty good numbers.
But they're not quite what they were looking for. They're
not really even close, actually, But again, you did a
great job. Then, over this meeting, in this call, or however,
it goes some other branch, you know, let's say dozens
of miles away, for some reason, they exceeded this goal
(43:24):
that was way out of reach, and on this call,
your boss's boss's boss on this call says, man, you
guys just just killed it. You did a great job.
You guys are just rocking these numbers. Man, We're so
proud of y'all. You're getting bonuses, you're getting this, you're
getting that everybody on this call needs to look up
to this particular group, to this bank and do what
(43:46):
they did, and you know, imagine feeling that.
Speaker 1 (43:50):
Yeah, then those those people who were meeting these increasingly
difficult sales goals, they were the minority for a while,
you know, and fairly often, and they often had to
achieve these things through unethical or illegal means. So that's
where we are, you know, as you said in all,
that's February of twenty twenty, just a few months ago.
(44:14):
What lessons we're learned from this retail bank conspiracy? Again,
not a theory, it's a conspiracy. Here's the thing. Part
of that twenty twenty deal with that three billion dollar
price tag includes a deferred prosecution agreement. That's an agreement,
a pact that could the positive way to say it
(44:39):
is that the bank could get further criminal or civil
charges if it engages in new criminal activities. So basically,
pay US three billion dollars, no criminal charges, but you're
in trouble because you got caught, and you'll be in
trouble if you get caught again. Okay, So trouble is
somewhere in this equation. My guy, smart en up.
Speaker 3 (45:00):
We had our eye on you. Yeah, it's true, it's wow.
I just I can't believe that they're still around because
I guess you know, they're one of those too big
to fail organizations, right, So it's like, I don't know
how you get away with this and how people didn't
(45:22):
do as you said, man and just pull all their
money out. Yeah you know. I mean, And even though
this is this ongoing, it feels even to me, kind
of like a distant memory. I just feel like the
attention span for stuff like this for consumers is often
pretty short, and if it doesn't actually affect me personally,
(45:43):
then why should I do anything about it? Why should I,
you know, go to that inconvenience of pulling all my
money out and starting over, you know, even though it's
not that big a deal to start any bank account,
but it's slightly inconvenient, inn't it, right?
Speaker 1 (45:55):
And you know there are I don't know about you guys,
but I go to extraordinary lengths to avoid any slight inconvenience.
I like a lot of people out there would like
to play life on easy mode. It barely ever happens,
but it's a nice thought. You're right, there was a
run on the bank, but it wasn't necessary. I mean,
(46:18):
there was a lot of terrible pr fallout from this,
and they went into overdrive on the Bernese front. But
a lot of investors reacted because remember they're kind of
like customers at a bank, but more important, you know,
they're the better customers. So the bank also, Wells Fargo
also set up a five hundred million dollar fund to
(46:40):
compensate the investors who took a hit or what do
investors say, who took a bath when Wells Fargo didn't
tell them that the banking business they had was not
as strong as all as fake accounts made it seem.
But asterisk that five hundred million dollar dollars is included
(47:01):
in that three billion dollars settlement total. So it's not
like they paid three billion dollars and then five hundred
million again. And this leads us to the conclusion as
it is, you know, to your point, to your point, Noel,
Obviously Wells Fargo was still around, It survived the Great Recession.
It assures the public, for its part and investors that
(47:24):
this will not happen again. This was, you know, somewhere
between a grave miscommunication in the in the command chain
or a few bad actors, but the bank itself. This
is true. The bank itself never condoned this activity.
Speaker 3 (47:41):
Yeah, it is true. They just.
Speaker 2 (47:45):
They forced it to happen without realizing it. Let's say,
but here's the deal. It's not as though Wells Fargo's
acting alone. We've all talked about before the Wacovia dealings
and the problem that they had before they were absorbed
by or I guess bought out and absorbed by Wells Fargo.
(48:07):
The problems with other major banking institutions, including very similarly,
a little regional bank from Ohio called Fifth Third. You
may have heard of this. You may have seen one
of their branches. They've got them all over the nation.
There are thousands of them, and they have roughly one
hundred and fifty billion dollars in assets. And guess what
(48:29):
they're accused of, the same thing, pretty much the same thing.
Speaker 3 (48:33):
Yeah, I didn't know anything about that. One actually had
my mortgage through Fifth Thirds back when I owned a
house in Athens years ago. That's fascinating. Now that's news
to me. Yep.
Speaker 1 (48:45):
They've been accused of, as you said, Matt, the same thing.
Right now, The litigation is ongoing, so we can come
back to this story with an update to pay on
how it all shakes out. And at this point, fellow
conspiracy realists, we pass the torch to you, because there
is a dilemma here. It's a big problem and something
(49:06):
we're thinking about, and it's something that maybe doesn't have
a satisfactory answer yet. Retail banks are it's an understatement
to say they're a huge part of the economy. It's
an understatement to say they are irretrievably embedded in our
financial lives. I mean, we've had people right in before
(49:26):
talking about, you know, from our cashlest Society episode, just
how difficult it is to live without some kind of
bank account, you know what I mean, and still be
in the real world system. So is a multi billion
dollar fine punishment enough? Are the banks, like you said, no,
are they truly too big to fail even when they're
(49:49):
caught red handed cheating? And you know to that point
that I think you had been making earlier too, Matt,
what would the approach punishment be if this is not appropriate.
Speaker 2 (50:04):
I'll tell you, yes, Ben. You remember you guys, remember
an episode we made quite a while back where we
interviewed Robert Maser. Yes, the infiltrator, the guy who helped
bring down an international bank because they were caught money
laundering for cartels. So I think I think there is
(50:24):
a world in which banks can be brought down. I
don't think this is gonna be it right.
Speaker 3 (50:33):
You know, for reasons.
Speaker 2 (50:40):
But I guess we have ourselves experienced, you know, just
through our interview and our connection with Robert, that it
is possible for a bank caught red handed to be
brought down.
Speaker 3 (50:52):
I better requires such a burden of proof. The way
he traced the money and followed the money and was
like literally, you know, running secret ops within the bank,
you know, I mean, it was like it you can't.
It's it takes a lot, a lot, a lot a lot,
it would seem, and it requires absolute proof of knowing wrongdoing.
(51:12):
Because the thing here is again you really they could
easily argue, well, yeah, no law against having aggressive sales goals,
you know.
Speaker 1 (51:22):
So yeah, I mean, these are these are great points.
And I love that you're bringing up. I love you're
bringing up that earlier case meant because I you know,
I was thinking when we were talking about doing this episode,
I was thinking, what's what's going to happen. People are
listening to this and they hear a wells Fargo ad
(51:46):
in our in our show. You know this is not
None of what we have examined today is speculation, right.
I think we're very clear when we're saying, well, this
is our opinion, right, you know, one or all three
of us, all four of us, one of our opinions.
(52:06):
But these are simply the facts. This is crazy. This
did happen, and really it is a matter of your
own personal judgment. What do you think the punishment should
have been. Do you think this was too much? Do
you think it wasn't enough? What do you think will
happen in the future. We want to hear from you.
You're the most important part of this show that remains
(52:28):
true today as it did from our first YouTube video.
So let us know. You can find us on Facebook,
you can find us on Instagram. You can find us
on Twitter. Not just as a show or an institution,
dore I see, but as individuals.
Speaker 3 (52:44):
That's right. If you wish to follow my core time activities,
you can do so on Instagram where I am at
how now, Noel Brown, I've been posting a lot of
Dutch oven cooking videos which marry me. I'll interest you.
I made my very first there's lamb Rogan Josh last
night with a big old lamb shoulder that I slow
(53:05):
cooked on the bone in this delicious Indian gravy for
about five hours, and I show like the progression of
it becoming delicious and falling off the bone. It was
a very successful experiment. I'm really excited about that Dutch
of him.
Speaker 2 (53:18):
That's making me very very hungry. Oh my goodness, time
for dinner.
Speaker 1 (53:25):
I think this, Matt, Is this the part where is
this an episode where you talk about your Instagram? Or
is this an episode where where you keep the audience
in the dark as dark as your awesome recording spot again?
Speaker 2 (53:39):
Oh yeah you can. You can follow me. There are
some great updated pictures of my new haircut. Just search
for Richard Blaze on Instagram. You'll find me. You'll see it.
Speaker 3 (53:51):
You cut your own hair, you cut your own hair,
mat or is that you let your your lovely wife
do it, perhaps your young son.
Speaker 2 (53:57):
I haven't touched my hair with shears or any other
cutting implement since this whole thing begins.
Speaker 3 (54:01):
So mainly just tearing it out and madness. Is that
what says yeah, it's all manual. Minds starting to fall
out in clumps. You know, I decaid, don't know. I
think I'm going to emerge from this with a receding hairline.
Speaker 1 (54:14):
I actually I'm actually getting kind of old testament now
with not shaving the beard or cutting my hair. But
what I've been trying to do to have some regularity
during the day is to is to put on clothes
when I talk to you guys, and turn on lights
so that I'm not just a voice of glowing eyes
in the dark. But if you want to check out
(54:36):
my quarantine beard on Instagram, you're more than welcome to
follow me at Ben Bullen on Instagram, at Ben Bullen
hsw on Twitter, wherein I investigate any number of strange,
unusual things and keep you updated on the useless skills
I am honing during quarantine. I don't know if I
mentioned it to you guys on air, but now I
(54:57):
can name all one hundred and eighteen elements the periodic
table and it does not matter. Let me just assure
you no one else bothered doing that. It does not
affect your life in any way whatsoever.
Speaker 3 (55:08):
I think it enriches your life. Ben and I'm I
say kudos to you for that.
Speaker 1 (55:14):
Thank you, thank you if there was an element called
thank you, Neil, which I know there's no.
Speaker 3 (55:19):
No, you know what I did, you guys, this is
my biggest claim to fame during this time. I'm not
gonna say which ones, but I definitely did a whole
day of recordings and zoom calls wearing no pants. Just
waiting that out there. Wait a second, No, I'm pants today. Pants? Okay,
yeah it was. I'm not gonna say if it was
(55:40):
this show or not. I do other shows, but I
definitely had some pretty high level executive producer type zoom
calls wearing no pants, and no one was the wiser
and if it felt like it gave me the upper hand.
Speaker 1 (55:51):
Honestly, you gotta stay seated, you know what I mean,
unless at the very end you want to pull one
of those groves. Oh well, wow, I'm wearing pats.
Speaker 3 (56:01):
Wow, I can verify.
Speaker 1 (56:04):
But so so what if someone has something to tell us?
What if you are listening, you have something to share
with your fellow audience members, but you hate social media?
Speaker 2 (56:17):
What then you can give us a call. Our number
is one eight three three std WYTK we've been going
through a ton of messages lately. Please call us. We
are waiting to hear from you. We we may you know,
we may respond with it a call in kind, or
we might just you know, listen and then talk about
(56:39):
it here. We've got a huge doc now running. It's great,
so please continue to write to us, give us your
thoughts on this episode, any other episode, a future one,
or just things you want to chat about while you're
hanging out in quarantine while we do the same. Please
do give us a call one eight three three st
d WYTK.
Speaker 1 (56:58):
And additional for longtime listeners, we have a show called
Strange News Daily that we'll be moving on to this feed,
so you'll be hearing something from us Monday through Friday
until the lights go out until Wells Fargo disappears. As
for this episode, you'll have to get in line behind Nesley.
Speaker 2 (57:18):
Oh and we're really excited about that show. It's gonna
be kind of like this one, where you're gonna get
lots and lots of researched information packed into a shorter episode,
hosted by our very own Ben Bollen. We think you're
gonna love it. So now let us know what you
think about that show as well as you're calling in
and writing to us and talk to us on Twitter
most boorly.
Speaker 1 (57:38):
It's produced by Dylan Fagan, which was a big get
for us. So we're, you know, like everybody else will
working live. We're rolling with the punches. But there's one
thing that will never ever change. That is this. If
you hate phones, if you hate social media, you can
always contact us about any old thing twenty four to
seven at our good old fashioned email address where we.
Speaker 3 (58:01):
Are conspiracy at iHeartRadio dot com.
Speaker 2 (58:22):
Stuff they don't want you to know is a production
of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app,
Apple Podcasts, or wherever you listen to your favorite shows.
Folks, welcome back. We've got a classic episode for you.
This one is proudly not brought to you by Wells Fargo.
Speaker 2 (00:06):
Unless it is.
Speaker 1 (00:08):
Unless it is, and they.
Speaker 3 (00:09):
Haven't heard this.
Speaker 1 (00:11):
The story of one of the most popular retail banks
in the United States definitely gave a couple of US
Acrossroads come to Jesus moment where we got into the story.
But back in twenty twenty, we, like so many other people,
learned that Wells Fargo had an entire side business doing
some highly illegal grifts.
Speaker 3 (00:32):
And when we did this exploration, I vowed to take
my business elsewhere, and I'm still with Wells Fargo to
this day. Out of sheer laziness.
Speaker 2 (00:40):
First National Bank of Atlanta into Wakovia, into Wells Fargo exactly.
Speaker 1 (00:46):
And a lot of people ended up in Wells Fargo because,
like I saying, they just got snapped up by an
increasingly gigantic Leviathan of finance. And I missed Wakovia because
the name sounded like a sneetz.
Speaker 3 (00:59):
It was nice to say, you're gonna call you.
Speaker 1 (01:03):
These boks were made for COVID and that's just what anyway. Yeah,
we'll get to this classic episode afterword from our sponsors.
Speaker 4 (01:11):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn this stuff they don't want you to know. A
production of Iheartrading.
Speaker 2 (01:35):
Hello, Welcome back to the show. My name is Matt,
my name is Noah.
Speaker 1 (01:40):
They call me Ben. We are joined as always with
our super producer Paul. Mission control decands, most importantly, you
are you. You are here, and that makes this stuff
they don't want you to know. Quick check in. I
think this is the first time any of us have
spoken today, or at least Matt, you and Knowle, it's
(02:00):
the first time spoken with you. Paul and I go
way back today. How's it going, guys, It's.
Speaker 2 (02:05):
Going really well. Having all kinds of interesting phone calls
with people that I've never met until today. So this
is just a day of new things.
Speaker 3 (02:14):
Really anything to write home about. Not yet, No, I
see very cryptic.
Speaker 1 (02:22):
Matt. I like it.
Speaker 3 (02:23):
I'm intrigued. I too have had some unusual phone calls
with people that I have never met and may never meet.
Who knows if I'll ever even leave my house again.
But I'd like to think that there is a future
where I will be able to get on an airplane
once again, because that's fun. It's fun to go other places.
(02:43):
We'll see what happens.
Speaker 1 (02:45):
Yeah, I'm actually doing some doing some runs later today
to you know, if people are immunocompromise, it's a tremendously
bad idea for them to leave their house, even if
they're in an area like George where the local leadership
is attempting to open up various businesses and institutions. So
(03:06):
I'm going to go do some no contact drop offs.
If you are immunocompromised, please please, please, still don't go outside,
even if everything else is open. It's just not worth it.
Speaker 3 (03:17):
Yeah. Guy, I know in Brooklyn who got COVID nineteen.
It was a mild case, but he just got the
go ahead from his doctor to leave the house. And
he pos his birthday today. Actually, yeah, so happy birthday.
I'm not gonna say his name because he may not
want people to know that he had the thing, but
happy birthday to you, my friend, and really glad to
(03:40):
see you get out. And he had he had a
mask on, was keeping it super safe. But yeah, it's
gotta be tough, you know, just like having that level
of isolation, especially if someone lives by themselves.
Speaker 1 (03:52):
And speaking of crises, it's safe to say that our
current financial system, like many individuals in the world today,
is in a state of crisis. This is yet another
crisis for the financial system. By the way, I think,
by the time people reach the age of let's say,
(04:14):
I don't know, arbitrarily eighteen, they've already experienced several huge
behamoths of financial crisis. But individuals in countries around the
world right now are being told to shore up their
finances and they're being chastised for quote unquote poor financial planning,
while at the same time, billion dollar corporations are getting
(04:36):
bailed out left, right, over and under. Some people would
call this the way of the world. Some would call
it a series of conspiracies. Yet the world of finance
and conspiracy, they're inextricably intertwined. You know, you could even
say the concept of money itself is a conspiracy. As
a matter of fact, we have said that on previous episodes,
(04:58):
and I stick to my guns on banks have been
accused of multitudes of financial crimes, many conspiracies, and even
at times assisting with things like government overthrows or cup d'tas.
This is not to say that all banks are all
bad right for now, they are a necessity. Billions and
billions of people rely on banks in some way, and
(05:21):
in turn, those banks rely on those billions of customers.
That's the official story. If this were a mural or
a portrait, that's the background, that's where that's happening. But
there's more to the episode, of course, and to get
you to the point of today's episode, we have to
first briefly explain how banks work. It sounds super simple,
(05:44):
but there are a few misconceptions we need to bust
and there's some things that we'll discuss that might surprise you,
but don't take our word for it. Here are the facts.
Speaker 2 (05:54):
Yes, the bank itself, the institution, the thing that we
all rely on, really is one big trust fall. A
bank is really only a thing, an idea concept that
works as long as everyone believes it does what it
does right. It's a lot like currency in general. If
you don't believe that thing in your pocket perhaps or
(06:16):
laying in a drawer somewhere, that weird paper like substance
that has some images on it, If you don't believe
that thing is worth what it's worth, then it is
in a thing.
Speaker 3 (06:25):
Yeah, it's like fairies. Like if you don't believe in
tinker Bell, then she dies, you know.
Speaker 2 (06:29):
Kind of yes, So let's talk about what we all
believe a bank is and does. Officially, it's a quote
institution that deals in money, and it substitutes and provides
other financial services. So really think about it this way.
Banks take in deposits money and then they loan out
money and drive a profit from the difference in the
(06:52):
interest rates that are paid and charged respectively. So when
you think about that, like how much money they can
make by lending money out and then charging interest on
that money they're lending. But the big thing here to
remember is that in order to have money to lend out,
they have to be taking money in.
Speaker 3 (07:08):
But make no mistake, I mean, the bank isn't really
built for you. I mean it's a business. It's designed
to make money for the shareholders. So it's primary function
really isn't to be some sort of you know, safe
haven for your money. That's almost like an afterthought. You're
really just feeding the machine with your money and then
(07:31):
they're investing it as they see fit. Essentially, that's an
oversimplified view of it. But yeah, you deposit money. When
you do, your money goes into this massive pool along
with everybody else's money, and then your account is credited
with the amount of your deposit, so you're able to
draw on that account to pay bills and write checks,
et cetera. Who still writes checks. I had to get
(07:52):
a single check the other day because I had to
pay off my car and I had to go to
the bank to get one check. It's the weirdest thing.
But yeah, that amounts to deducted from your account balance,
and you can, you know, theoretically earn interest on that balance. Uh,
and that can actually be added back to your account.
This is all kind of one oh one banking basics here.
Speaker 1 (08:14):
Yeah, I called it day one stuff because that's the
primary misconception that I want to bust here. The primary
function of a bank is not you as an individual customer.
And although it may sound basic, it may sound like
day one stuff, it is a huge misconception that is
very distressingly common. The bank's primary purpose, as far as
(08:37):
you are concerned, is just to take money from you,
whether that's money you deposit, whether that's money that you
pay on a loan in principle or in interest where banks,
you know, want to make more more revenue. That's what
that's what you are. You know, that's what you are,
and you can We've talked about this in previous episodes.
(08:58):
If you'd like to learn more about the nuts and
bolts of this the banking system, especially here in the US,
do check out our earlier explorations of the FED the
Federal Reserve for more details. That's the gist. The amount
of interest that you get on your checking account or
your savings account. In the big picture, it's peanuts. It's
(09:19):
better than nothing, but it's peanuts. Bank customers matter the
absolute most when we take out loans and pay interest
on those, or in a panic situation, in a worst
case scenario for a bank, when every customer of a
bank wants their money back in cash all at once,
because you see, yeah, you see, the banks won't have it.
(09:40):
They just won't have it.
Speaker 3 (09:41):
I mean, it's essentially I mean not to be de
reductionist about it, but it reminds me of a Ponzi scheme.
The whole thing is like a paying Peter to robbing
from Peter to pay Paul scenario. Although it's all under
the guise of being legitimate. I mean, if you go
back and say I want my money, shouldn't you be
able to get your mind? But if everyone does it
at the same time, then it's not going to work out.
(10:03):
And yet we trust in this system because it's somehow
backed by some kind of promise by the government or
the FDIC or what have you.
Speaker 1 (10:10):
Yeah, and that's what's happening in Russia right now as
we record this, which is just for peak behind the
curtain right at the very end of April twenty twenty.
So this can happen again countries around the world. Has
happened in the US as well. So you might be
asking yourself rightly, Okay, guys, if this is all true,
and we assure you it is, then why am I,
(10:34):
as an individual checking account holder important at all? Right?
If I don't have a loan, if I don't have
a mortgage, why do I matter? Well there are two reasons. First,
as we established earlier, banks are using your money, specifically
your money sometimes even if you're not working with the bank,
which is weird but true. And second, and this is
(10:55):
just basic sales psychology. Once people choose a bank, they
tend to stick with that bank. So if you're the
average person with a checking account at one bank, you
are far far more likely to have a credit card
account with them, a savings account or alone with them
as well. And these accounts all have differing terms, and
depending on a ton of mitigating factors, one person may
(11:18):
have a much better deal than another. Right, some people
have credit cards with maybe what like nine percent interests,
and other people have credit cards with like twenty five
point nine to nine percent interests. There's a lot in play,
and we should add a customer with a line of
credit and a line of savings. From the bank's perspective,
you are far more profitable than an ordinary Jenny or
(11:40):
Jack who just has a checking account.
Speaker 3 (11:42):
Yeah, it's true. And it's also people often are a
little bit lazy, and they might not shop around for
a better rate, or you know, they might get that
zero interest, you know, introductory deal and then forget to
pay it off when the rate gets jacked up to
like twenty percent or some ungodly And honestly, I'm not
(12:02):
to that degree, but I'm one of those in terms
of laziness. I have had a bank account that has
changed hands like three times throughout the course of my
my financial life, and I'm just kind of stuck with
whatever it ended up being, you know, just because it's
a pain in the butt to like close your bank
account and start over and redo all your cards and
(12:24):
all that stuff. And I think the banks are kind
of a they're sort of capitalizing on that, right, people
being stuck in a routine and being a one stop
shop and just being easier to stick with what they
know than to go maybe shop for a better deal.
Speaker 2 (12:38):
I yes, and you know, I'm in actually a pretty
similar situation. Tool. And the last time I had to
go into the bank, I noticed something, and it was
that the person I was speaking with it wasn't just
a teller, it was, you know, a banker. You know,
if you, if anyone has ever had that experience where
you want.
Speaker 1 (12:55):
One you go in the office or on a desk.
Speaker 2 (12:58):
Yeah, exactly. And what I was attempting to do was
open a new account with them, because I've been an
account holder for a while and I wanted to open
a new specialized checking account. And what happened was, rather
than just having that conversation opening that account, having that
one transaction, they were attempting to get me to open
(13:19):
a credit card with them. They were attempting to get
me to change over a mortgage to them and do
all these other things and insurance. Yes, and it's something
that I'm assuming is pretty common throughout the banking world.
Speaker 1 (13:33):
Yes.
Speaker 3 (13:33):
Selling.
Speaker 1 (13:34):
Yeah, the concept is so common that there is a
name for it in the industry. It's called cross selling.
It started out as an internal term, but now, for
reasons that will will become abundantly clear in a few minutes,
it is a term that is in the public sphere.
Success for okay, so Wells Fargo or Wacovia or you know,
(13:58):
five Thirds Bank or whatever, any bank that you used,
any bank that you walk into and have a checking
account with and so on. Those are what's called retail banks.
And for a long time, success at retail banks was
measured by how successful the bankers or even the people
on the phone were at cross selling. And that's encouraging
(14:21):
a customer, Remember our Jenny or Jack with one checking
account to open up multiple other accounts to be fair.
This also happens if you have like a credit card
with Bank of America or something, they're like, hey, make
a savings account with us right ever thought of buying
a boat, et cetera. This idea is an invention credited
to a single man. His name is Richard Kovikchik's he
(14:45):
was a Wells Fargo CEO. He's a guy who reputedly
came up with the idea of cross selling during his
time as a CEO at Northwest Corporation. And we've got
a thing from an interview he had in nineteen ninety eight,
I think with Vanity Fair maybe where he summarizes his
(15:06):
idea and it sounds normal now, but when he said it,
it was pretty innovative.
Speaker 3 (15:13):
Yeah, he really kind of changed the lingo of banking.
He started referring to branch employees or the idea of tellers.
I called them salespeople, and consumers referred to them as
customers rather than clients. And another one that I've heard
that I have no doubt sprang from the same kind
(15:35):
of shift was all of the various products that the
bank can sell you, you know, like these credit cards are products.
All of these up cells or these cross sells you're
talking about are referred to as products, which I find
very strange. You know, it's such a non tangible thing.
Like insurance being a product.
Speaker 2 (15:54):
Well, and just from personal experience, there are so many
different kinds of products that these retail banks offer customers
that seem extremely similar. But there's like seven different kinds
of checking account, there's like six different kinds of savings
accounts and all this other stuff. And it's also that
you can offer exactly what the customer needs or the Yeah,
(16:17):
the customer or not the client.
Speaker 1 (16:20):
I don't think it's pre convenience.
Speaker 3 (16:22):
No, it's definitely not. You guys. It reminds me of
when I got my car loan a handful of years
ago and like they made me, you know, this this
offer of this interest rate and it was like higher
than I thought I should be offered because I have
really good credit. And then I was gonna walk away,
and they said, oh ho ho, wait a minute, now,
we didn't know you. If we just told us you
wanted it low, that we would have I'm like, what, like,
(16:46):
just offer me the rate that I am do based
on my score, Like why are you trying to nickel
and die me. It's the same thing. And this was
through a small community bank, but it was all like,
you know, at the hands of these kind of sleazy
car dealers. Not not to malign all card dealer. I'm
sure many of you are great, most of you even,
but this one in particular, I felt very kind of
bent over a bearl a little bit, and I got
(17:07):
them down to where I wanted to be, but I
felt kind of ichy. The whole thing made me feel
like I didn't want to do business with them anymore.
Speaker 1 (17:14):
Yeah, yeah, it's gonna The anecdote I always think of
is like, imagine you walk into a fast food restaurant
and you order, I don't know, a cheeseburger, and they're like,
all right, do you want poop on your cheeseburger? Why?
Why is that part of the conversation now, I don't
even want the burger cheez.
Speaker 2 (17:35):
Well, look, we got to get rid of all this
poop somehow, and you know, if you'll accept it on
your burger, then you know we're getting rid of it
in that way and you're getting what you want.
Speaker 1 (17:44):
We'll give you a loyalty card, how about an Amazon
gift card? So that's I mean, it's true. No, you know,
I had to I had to interject a little like
I think it could be advertised as convenience this plethora
of options I'm using over correctly. Yeah, but I think
what it's I think what it's really meant to do
(18:05):
is to make things inconvenient, to make it more difficult
to find the right deal. The options are are cane
by design, you know, just like a life insurance or
just like a A lot of medical insurance or health
insurance plans function that way. That's just a that's just
a byproduct of private industry trying to maximize profit because
(18:29):
a lot of people won't do the research. Well's fargo.
It was really really good at this. They were considered
for some time and not insignificant amount of time, the
best cross seller in the retail banking game. But there
was one problem, I know, just one.
Speaker 2 (18:47):
Maybe you know why there's a problem then, yes, why
because imagine if you're the best seller at something, now,
imagine your numbers are on a really nice trajectory upwards. Now,
in order for you to maintain profitability and to increase
year over year, like increase, you have to continue your
(19:09):
track rate as the best seller, right, and then over achieve.
Speaker 3 (19:13):
Not to mention, you want to get that set of
steak knives, you know, and the coffee is for closers.
So you want to get coffee, you don't want to
get cut off. You need that stuff to sell, right.
Speaker 1 (19:24):
It's the unsustainable, unsustainable growth model, exponential growth model of
capitalism year over year, and it applies to a lot
of industries. So I mean, that's what I was going
to say. I said there was one problem, but really
there were millions of problems. You see Wells Fargo and
other banks. We're getting a lot of new accounts, getting
(19:46):
a lot of new customers, cross selling. But these accounts,
it turns out, were made up out of thin air.
What are we talking about. We'll tell you after we'd
from our sponsor. Here's where it gets crazy. So let's
(20:08):
say you don't have enough accounts, Well, well, why don't
you make them up? As early as twenty eleven, still
like nine years ago, easily, outfits like the Wall Street
Journal started noting this enormous internal pressure that Wells Fargo
was exerting on everybody from the bank manager level on down.
(20:31):
They were supposed to measure up to these incredibly difficult
sales quotas, these cross selling quotas. These were cartoonishly implausible.
Vanity Fair in fact noted that several of these goals
were proven to be literally mathematically impossible to achieve. That's nuts. Like,
(20:54):
even if you pitched everything to everyone, every single customer
got every single offer possible and they all said yes,
you still wouldn't meet the quota at some points.
Speaker 3 (21:07):
That's crazy.
Speaker 2 (21:08):
That's crazy, It really is so so. Imagine that you
are let's say a bank manager or one of the
main salespersons at you know, bankers, or just salesperson at
the bank. Imagine that you are aware that you are
expected to sell x number of new accounts or open
(21:30):
x number of new accounts, and you only you know,
you see, like you literally physically see x minus fifty
people a day, right, so you know that there's no
way you're going to do that, There's no possible way.
What do you do when you know your job is
on the line. That number is directly related to how
(21:52):
well you do, if you can get a raise at
some point, if you can keep your job even well.
They started doing something that they weren't supposed to do,
and that's just opening new accounts that would count towards
their quota but wouldn't actually be tied to somebody who
wanted an account.
Speaker 3 (22:12):
Wait a minute, Wait a minute, isn't that called fraud?
Speaker 1 (22:16):
Ding ding ding? Yes, it is. Indeed there was. There's
a guy named Dennis Hambeck who once upon a time
was an employee at Wells Fargo. Now this guy had
extensive banking experience, was his career. He got into banking
as a young cat before all these massive consolidations, right
(22:39):
before the financial whales starts swallowing the other smaller financial fish,
and well, whales are mammals. But you get it, you
know what I'm talking about. So he said this in
a quote, just to hammer home that point that you made, Matt,
about how intense this pressure was. He said, every morning
we had a conference call all with the managers. You
(23:01):
were supposed to tell them how you were going to
make your sales goal for the day, and if you didn't,
you had to call them back in the afternoon explain
how you why you didn't make it, and how you
were going to fix it. It was really tense. Uh
So you can imagine that, you know, there's a little
problematic if we're being.
Speaker 3 (23:21):
A terrible place to work, as almost as though it
would drive you to do something untoward m exactly.
Speaker 1 (23:31):
Nol it's it's like, think about this, like, imagine you
go to uh, let's say your your local hardware store,
and you're planning to buy a leaf blower and a
screwdriver Phillips flathead, it doesn't matter for this example, but whatever,
whichever one you like most, you're supposed to get them.
You pay for them, and you're gonna get them delivered. Later,
(23:52):
you learned that the store did not just sell you
a leaf blower and your favorite screwdriver. They also sold
you a chainsaw, around two cases of blue power Aid,
maybe some outdated lamp fixtures, and they threw it along
gnome and they charged you in some way for all
of it. And now imagine that delivery took months or
years and you didn't find out about it until much later.
(24:15):
This sounds silly, right, It's like an arrested development sitcom
esque thing, but that's pretty much what happened in this scenario.
In real life, this happened to people at Wells Fargo.
Speaker 2 (24:28):
Yes, Ben, the the routers and Poweraid example feels like
it's out there, but we assure you it is not
that different. So let's imagine one of those individual employees
knowing they have to make this quota. So let's say
they're talking to you on the phone as a customer
and they convince you to take out a large loan,
(24:50):
let's say, let's say a ten thousand dollars loan. They
convince you to do that with the caveat that they're
going to immediately repay you five thousand dollars or like
pay off five thousand dollars of that loan. So really
you're only taking out a five thousand dollars loan, but
on paper, and according to the bank, they're going to
get credit for taking out a ten thousand dollars loan,
(25:11):
and it's just a way for them to sustain themselves
within the banking infrastructure. And that is most certainly an
unsustainable thing.
Speaker 1 (25:20):
Yeah, yeah, it's I like the point you made about
Ponzi's scheme. No, that was occurring to me as well,
because it very much is an unsustainable growth situation. Things
start to crack. In two thousand and five, there's a
customer named Bill Moore and he goes to Dennis Hanbeck,
who he mentioned earlier, and he's he's befuddled, and he's
(25:43):
kind of indignant because he says, hey, Dennis, I see
that I have a checking account and a savings account,
and they like date back to five years ago. I
didn't ask for them, and I don't want them. And
(26:05):
so Hambick, being a stand up guy, is on the case.
Speaker 3 (26:09):
Yeah, I think it's interesting. I mean, really is doing
some pretty serious, serious slewth thing. He looks into it
and discovers that the banker who opened those accounts, as
you typically need to have with opening an account, there
was a driver's license number that was entered as more
WF zero zero zero zero zero, which sounds like a
(26:32):
really wonky like vanity license plate if you ask me.
And to boot. The date of issuance was January first,
two thousand, which was a holiday when the Department of
Licensing of Washington State would have been closed. And Hamback
is not letting this go. He kind of is getting
(26:54):
the brush off for management. So Hamback retires. I think
he was just kind of fed up because he you know,
he was the one that was looking into this, and
he was the one that was finding some very fishy evidence,
and he wanted to avoid being fired for not resorting
(27:14):
to these kinds of fraudulent activities in order to make
those unrealistic expectations, and Ben I wanted to mention, I mean,
so it's not like management specifically instructed employees to do
this to break the law, but more or less implied that,
you know, put up or shut up, like you're out
(27:35):
if you don't meet these expectations. It's sort of like
there was a big cheating scandal in Georgia public schools
years ago, and it was because of unrealistic expectations for
standardized tests. And while you know, obviously you can't condone
the cheating, you understand why some of these teachers might
have done that because they felt pressured to meet these standards.
But again, it's not like they're superiors instructed them to cheat.
(27:58):
Is that similar here, benus were making these decisions on
their own.
Speaker 1 (28:02):
Yeah, they were heavily incentivized to make those decisions. I think.
I think that's a great comparisonal because the thing about
it is it would be illegal for the banks and
the executors to come out and say, look, make up
these accounts and break the law. As a matter of fact,
you know, we said Hamback refused to play the game.
(28:24):
It's interesting in official company literature, this kind of unethical
behavior is referred to literally as gaming, and so they
can't They won't ever compromise themselves by saying, you know,
go break numerous financial laws. They'll just say, hey, why
aren't you meeting these sales quotas your job is in jeopardy,
(28:47):
And usually that's all the incentive people need.
Speaker 3 (28:49):
But to your point, Ben, they almost laid out how
to do it by having it in their company literature
as a thing you should not do, and even give
it a name. I think that's pretty interesting and teachable here.
Speaker 1 (29:04):
Yeah. Yeah, it's just like the frozen grape concentrate from
the days of prohibition that said do not do the
following steps because it will result in fermentation and make
wine number one. You know, it's exactly like that. And
to quote to quote Yates from the Second Coming, the
(29:24):
Center could not hold right, or to paraphrase them, this
was unsustainable and very very soon things would fall apart.
Will explore the fallout which continues today. After a word
from our sponsors.
Speaker 3 (29:45):
And we're back talking more about banking, because it's it's
not as boring as it might seem. You guys, there's
some pretty shady stuff going on at Wells Fargo their
own analysis that they did between twenty eleven twenty fifteen
found that it's employees that opened more than one point
(30:06):
five million deposit accounts and more than five hundred and
sixty five thousand credit card accounts that may or may
not have actually been real. Uh, but then we can't forget.
And this is always the point that I but when
I thought back on this story, these weren't like made
up identities. These were like duplicate accounts of real people.
(30:27):
How did they think this was? That they were gonna
get away with this for very long? It just seems
like such a desperate move, which clearly it was.
Speaker 2 (30:34):
It feels like one of those things that you get
away with until you can't, and you you sustain what
you've got and how everything is going until it all
falls apart. It's building that house of cards situation where
you know, at some point the bill comes due, but
it's not going to be today or tomorrow.
Speaker 3 (30:52):
Probably.
Speaker 1 (30:52):
It's like the boiler Room. You remember that film? Mm hmm, yeah,
I think I just liked the boiler Room. Oh I'm
that But you're right, So some customers, obviously we're gonna
find out about this because some of those accounts opened
in their names had fees, so they would get they
(31:13):
would be asked to pay these fees on accounts that,
as far as they knew, did not exist. Some customers
even had collections agencies calling them due to these unpaid
fees because again they didn't know that the accounts existed.
They weren't getting notified of the fees. Even the first
(31:33):
time they would find out about one of these fraudulent
accounts is when they were getting shaken down by a
collections agency. So just imagine what that does to your
credit as well. This has lasting financial consequence for people totally.
Speaker 3 (31:48):
And I mean I think that, you know, I'm just
guessing here that Wells Fargo employees were banking on the
fact that, you know, a lot of these fees are
little nickel and dime fees here and there that you
might not even notice. I certainly don't scan through my
bank ledger and try to pick, you know, pick out
every single little fee or whatever. I mean, you know,
I definitely glance at it from time to time, but
I don't go through it with like a fine tooth comb.
(32:10):
And it's such a negligible amount. It's not like you
take a big hit to your bank account and all
of a sudden thake, something's up, right.
Speaker 2 (32:17):
You know what I'm gonna do immediately following this episode,
go through that bank account.
Speaker 1 (32:22):
Yeah, fine, tooth a lot of people while you're there.
Go ahead and check just in general, fellow listeners, go
ahead and check your cell phone bill. See what kind
of service charges have just popped up over time. And definitely,
I'll say it, I'm not get in trouble for this,
but definitely keep an eye on Comcast. They are, you know,
they're they're voted again number one most hated company in
(32:48):
the US. That's not my opinion, that's a fact.
Speaker 3 (32:51):
Yeah.
Speaker 2 (32:52):
Yeah, just whoever your ISP is, really it doesn't matter.
Speaker 3 (32:56):
Just check it.
Speaker 2 (32:56):
Check all those bills, keep.
Speaker 1 (32:58):
An eye on them because those plans change, right, They're
meant to change in ways that you might not be
aware of unless you are paying mindful attention. So this gaming,
as they called it, this unethical behavior, was so ubiquitous
that it even created related kind of terms, slang terms internally.
(33:22):
There's one called pinning, and that meant assigning customers pin
numbers without their knowledge. That's incredibly disturbing because, as you know,
a pin number is supposed to be yours. It's like
it's sacro sanct It's similar to a bank's version of
(33:42):
your Social Security number. No one else is supposed to
know it. But if someone makes up a pin number
that you do not know, that means they can impersonate
you on a Wells Fargo computer and then boom, boom, boom,
they can enroll you in all sorts of quote unquote
products without your no. So boom, Now you've got auto insurance. Boom.
(34:02):
Now you had a Carlan boom, Now you had a
credit card. And this was nuts, because the most mystifying
thing about this still is not even how widespread it
is to me, it's how blatant it was. The LA
City's Attorney Office found that there were one hundred and
ninety three thousand non employee accounts opened between twenty eleven
(34:25):
and twenty fifteen. And get this, the only email name
listed for them was Wellsfargo dot com. This is just
at Wells Fargo dot com.
Speaker 3 (34:35):
Wow.
Speaker 1 (34:36):
Wow, it's not like even not even trying, you know,
it's like not even doing like level one improv. I
bet we could make I bet we could make like
right now, we could make as many fake names as
we wanted. You know, Tad Dorgenson, that's not a real name.
That's still better than Wells Fargo dot com.
Speaker 2 (34:57):
Or you get even if you just put like ceu
u st as in customer and then put a string
of like, you know, numbers and letters or something. It's
that easy, cheeze. But that takes time. And I guess
you had to make so many so quickly age what they.
Speaker 1 (35:15):
Did going to that point of desperation, you know. And
on September eighth, twenty sixteen, Wells Fargo did settle with
some authorities. They paid one hundred and eighty five million
dollars to three institutions, the Consumer Financial Protection Bureau, the
Office of the Comptroller of the Currency, which is a thing,
(35:38):
and the City and County of Los Angeles. They wanted
to settle the charges of a massive fraud. As part
of this agreement, they were able to avoid admitting that
they had done anything wrong.
Speaker 2 (35:53):
Now that sounds familiar. That sounds pretty dang familiar, you know.
Speaker 3 (35:57):
To be fair, they absolutely have plausible deny of ability.
The only thing they were guilty of was having high standards.
Speaker 1 (36:04):
There we go, there we go. Yeah, as you can
tell in a universe to the left of this, the
four of us are are lawyers.
Speaker 2 (36:11):
Yeah, it's true.
Speaker 1 (36:13):
I think we would be good in the courtroom. So
it's weird because they all they did, they did do
one other thing aside from pay one hundred and eighty
five million dollars. They fired. They fired around a thousand employees,
maybe a little more. And these were mostly juniors. They
were fired for gaming. If you think about it, these
(36:33):
were sacrificial goats just sort of meant to be a propitiation.
They were meant to appease the gods of regulation. And
we know what you're all thinking. You know what everybody
is thinking. Hey, one hundred and eighty five million dollars
is a big deal to me. But isn't that chump
change for such a huge bank. The answer is yes.
Speaker 2 (36:56):
It was about three percent, right, three percent of second
quarter profits of that year. So there are four quarters.
One of those quarters had to shape off three percent
in order for them to be Okay, that's crazy.
Speaker 3 (37:10):
It's also way less than some executives have made over
the past five years. Gentlemen, I propose that we join
our forces and start a bank. What do you say,
get out of this podcasting rat race and start ourselves
up a bank. Surely, no, you won't do it.
Speaker 2 (37:33):
I won't do it. My soul shall not allow boys.
Speaker 3 (37:37):
That's fair. I respect that.
Speaker 1 (37:40):
So yeah, but you know I kind of started a bank.
Speaker 3 (37:43):
Yeah yeah, well yeah, the Ben Bank. The Ben Bank
deals exclusively in ben bucks.
Speaker 1 (37:48):
Unencumbered by souls. Yeah, also true.
Speaker 3 (37:52):
But you know, so you then you understand Ben as
the head of the Bend Bank. This is all just
the cost of doing business, my guy, right.
Speaker 1 (38:00):
Yeah, yeah, I want to say, in case this plays
in court later, technically I am not on the executive board.
I am a consultant, so nice try.
Speaker 3 (38:11):
For the record, that was me lapsing into my douchebag
executive voice when I said, my guy, there, I just
had to walk that one back a little bit.
Speaker 1 (38:21):
I like it.
Speaker 3 (38:22):
People say, yeah, I just you know, it has to
be tongue slightly in cheek. But yeah, man, seriously, I
mean this is it was a slap on the wrist
is even putting it uh strongly? You know?
Speaker 1 (38:36):
Right, yeah, that's a great point. I mean a thump
on the ear, you know, yeah, yeah, a finger wag
and a strong sentence using your full name exactly. That's
that's the issue with it, because this was I mean,
this literally is a cost of doing business. They didn't
emit wrong, Douane. They had plausible deniability. In short, this
(39:00):
bank thought they got away with it until that is,
employees like Hamback started coming forward, and there's there was
a list of employees who complained internally, because like any
large institution, there are channels through which you're supposed to
send your complaints. The list of employees who were skized
(39:21):
out by this and complained it stretches back over ten years.
People knew what was up, you know. Like again, it
might sound like we are vilifying Wells Fargo, but we're
talking about the crimes of an institution. Really, we're not
talking about any of the employees in the banking industry.
(39:43):
We're not talking about any of the employees in Wells
Fargo specifically. Right, These people are not the ones who
said make these impossible sales quotas.
Speaker 3 (39:53):
Yeah. So, as of this year twenty twenty, Wells Fargo
has agreed to rebillion in settlements for criminal charges and
a civil action that's stemming from its widespread mistreatment of
its customers in its community bank over a fourteen year period.
(40:15):
Court papers show that prosecutors described the insane environment that Ben.
I mean, honestly, I was responding to when you first
said at the top of the show, you know, checking in,
explain to me why you didn't make it, you know,
justify your actions every single day. I mean, sure, accountability
is one thing, but this was very much like you
(40:36):
described it, Ben in your notes, as a pressure cooker
environment that was kind of created, just absolutely toxic work environment,
right so to very low level employees.
Speaker 1 (40:46):
Yeah, absolutely, this is this is I don't know, We've
got a lot of people in the audience who've worked
in sales jobs or something with commission I don't know
if you guys have ever done that. I have not,
but it feels like a very demanding situation to be
(41:07):
put in, even when there's you know, absolutely no unethical behavior.
Most commissioned sales do not require unethical behavior. But like,
think about the pressure the next time you're in a
brick and mortar store. Think about the pressure and employees
under when they ask you those series of questions and
a purchase like have you ever bought something? And you know,
you just buy one thing you need, like maybe a
(41:28):
cable somewhere, or you're buying some pants or you know,
whatever you want to buy, and then the cashier starts
asking you a series of questions like what's your phone number,
you want to sign up for our credit card, you
want to sign up for a rewards card, and so on.
Speaker 3 (41:43):
Yeah, I always say I'm good, Like when they ask
for my phone number or email. No, I don't ever
want anyone to have that, because there's no reason for it.
They act like it's said, oh so we can better
serve you next time, or have you on my database
and know what you like. I don't know why anyone
would ever give out their information at a brick and
mortar store like that, because you can.
Speaker 2 (42:03):
You can get special perks guys, right, and now we're
family once they have all my info, Look, just give.
Speaker 3 (42:11):
Me a card and punch a hole in it when
I buy a thing, and then give me a free
thing when I've punched enough holes in it. You know,
I'm old school like that. I'm finally that model.
Speaker 2 (42:21):
Yeah, well, so imagine that you are. Again. We keep
trying to put ourselves in the position of the lower
level employees at you know, in an institution like this
when you like, maybe you have experienced a maybe a
quarterly meeting or a meeting with your company where everybody
gets together and they talk about the state of the
(42:41):
company and what's going on, and everything you know is
going up or down or for this reason, for that
other reason, things are going great or terribly. And imagine
you're in one of those meetings and you know that
you your your bank, your local chain of the bank,
and your manager. You guys did meet up to the standards.
(43:01):
But you guys did everything right, and you tried as
hard as you could, and you made some pretty good numbers.
But they're not quite what they were looking for. They're
not really even close, actually, But again, you did a
great job. Then, over this meeting, in this call, or however,
it goes some other branch, you know, let's say dozens
of miles away, for some reason, they exceeded this goal
(43:24):
that was way out of reach, and on this call,
your boss's boss's boss on this call says, man, you
guys just just killed it. You did a great job.
You guys are just rocking these numbers. Man, We're so
proud of y'all. You're getting bonuses, you're getting this, you're
getting that everybody on this call needs to look up
to this particular group, to this bank and do what
(43:46):
they did, and you know, imagine feeling that.
Speaker 1 (43:50):
Yeah, then those those people who were meeting these increasingly
difficult sales goals, they were the minority for a while,
you know, and fairly often, and they often had to
achieve these things through unethical or illegal means. So that's
where we are, you know, as you said in all,
that's February of twenty twenty, just a few months ago.
(44:14):
What lessons we're learned from this retail bank conspiracy? Again,
not a theory, it's a conspiracy. Here's the thing. Part
of that twenty twenty deal with that three billion dollar
price tag includes a deferred prosecution agreement. That's an agreement,
a pact that could the positive way to say it
(44:39):
is that the bank could get further criminal or civil
charges if it engages in new criminal activities. So basically,
pay US three billion dollars, no criminal charges, but you're
in trouble because you got caught, and you'll be in
trouble if you get caught again. Okay, So trouble is
somewhere in this equation. My guy, smart en up.
Speaker 3 (45:00):
We had our eye on you. Yeah, it's true, it's wow.
I just I can't believe that they're still around because
I guess you know, they're one of those too big
to fail organizations, right, So it's like, I don't know
how you get away with this and how people didn't
(45:22):
do as you said, man and just pull all their
money out. Yeah you know. I mean, And even though
this is this ongoing, it feels even to me, kind
of like a distant memory. I just feel like the
attention span for stuff like this for consumers is often
pretty short, and if it doesn't actually affect me personally,
(45:43):
then why should I do anything about it? Why should I,
you know, go to that inconvenience of pulling all my
money out and starting over, you know, even though it's
not that big a deal to start any bank account,
but it's slightly inconvenient, inn't it, right?
Speaker 1 (45:55):
And you know there are I don't know about you guys,
but I go to extraordinary lengths to avoid any slight inconvenience.
I like a lot of people out there would like
to play life on easy mode. It barely ever happens,
but it's a nice thought. You're right, there was a
run on the bank, but it wasn't necessary. I mean,
(46:18):
there was a lot of terrible pr fallout from this,
and they went into overdrive on the Bernese front. But
a lot of investors reacted because remember they're kind of
like customers at a bank, but more important, you know,
they're the better customers. So the bank also, Wells Fargo
also set up a five hundred million dollar fund to
(46:40):
compensate the investors who took a hit or what do
investors say, who took a bath when Wells Fargo didn't
tell them that the banking business they had was not
as strong as all as fake accounts made it seem.
But asterisk that five hundred million dollar dollars is included
(47:01):
in that three billion dollars settlement total. So it's not
like they paid three billion dollars and then five hundred
million again. And this leads us to the conclusion as
it is, you know, to your point, to your point, Noel,
Obviously Wells Fargo was still around, It survived the Great Recession.
It assures the public, for its part and investors that
(47:24):
this will not happen again. This was, you know, somewhere
between a grave miscommunication in the in the command chain
or a few bad actors, but the bank itself. This
is true. The bank itself never condoned this activity.
Speaker 3 (47:41):
Yeah, it is true. They just.
Speaker 2 (47:45):
They forced it to happen without realizing it. Let's say,
but here's the deal. It's not as though Wells Fargo's
acting alone. We've all talked about before the Wacovia dealings
and the problem that they had before they were absorbed
by or I guess bought out and absorbed by Wells Fargo.
(48:07):
The problems with other major banking institutions, including very similarly,
a little regional bank from Ohio called Fifth Third. You
may have heard of this. You may have seen one
of their branches. They've got them all over the nation.
There are thousands of them, and they have roughly one
hundred and fifty billion dollars in assets. And guess what
(48:29):
they're accused of, the same thing, pretty much the same thing.
Speaker 3 (48:33):
Yeah, I didn't know anything about that. One actually had
my mortgage through Fifth Thirds back when I owned a
house in Athens years ago. That's fascinating. Now that's news
to me. Yep.
Speaker 1 (48:45):
They've been accused of, as you said, Matt, the same thing.
Right now, The litigation is ongoing, so we can come
back to this story with an update to pay on
how it all shakes out. And at this point, fellow
conspiracy realists, we pass the torch to you, because there
is a dilemma here. It's a big problem and something
(49:06):
we're thinking about, and it's something that maybe doesn't have
a satisfactory answer yet. Retail banks are it's an understatement
to say they're a huge part of the economy. It's
an understatement to say they are irretrievably embedded in our
financial lives. I mean, we've had people right in before
(49:26):
talking about, you know, from our cashlest Society episode, just
how difficult it is to live without some kind of
bank account, you know what I mean, and still be
in the real world system. So is a multi billion
dollar fine punishment enough? Are the banks, like you said, no,
are they truly too big to fail even when they're
(49:49):
caught red handed cheating? And you know to that point
that I think you had been making earlier too, Matt,
what would the approach punishment be if this is not appropriate.
Speaker 2 (50:04):
I'll tell you, yes, Ben. You remember you guys, remember
an episode we made quite a while back where we
interviewed Robert Maser. Yes, the infiltrator, the guy who helped
bring down an international bank because they were caught money
laundering for cartels. So I think I think there is
(50:24):
a world in which banks can be brought down. I
don't think this is gonna be it right.
Speaker 3 (50:33):
You know, for reasons.
Speaker 2 (50:40):
But I guess we have ourselves experienced, you know, just
through our interview and our connection with Robert, that it
is possible for a bank caught red handed to be
brought down.
Speaker 3 (50:52):
I better requires such a burden of proof. The way
he traced the money and followed the money and was
like literally, you know, running secret ops within the bank,
you know, I mean, it was like it you can't.
It's it takes a lot, a lot, a lot a lot,
it would seem, and it requires absolute proof of knowing wrongdoing.
(51:12):
Because the thing here is again you really they could
easily argue, well, yeah, no law against having aggressive sales goals,
you know.
Speaker 1 (51:22):
So yeah, I mean, these are these are great points.
And I love that you're bringing up. I love you're
bringing up that earlier case meant because I you know,
I was thinking when we were talking about doing this episode,
I was thinking, what's what's going to happen. People are
listening to this and they hear a wells Fargo ad
(51:46):
in our in our show. You know this is not
None of what we have examined today is speculation, right.
I think we're very clear when we're saying, well, this
is our opinion, right, you know, one or all three
of us, all four of us, one of our opinions.
(52:06):
But these are simply the facts. This is crazy. This
did happen, and really it is a matter of your
own personal judgment. What do you think the punishment should
have been. Do you think this was too much? Do
you think it wasn't enough? What do you think will
happen in the future. We want to hear from you.
You're the most important part of this show that remains
(52:28):
true today as it did from our first YouTube video.
So let us know. You can find us on Facebook,
you can find us on Instagram. You can find us
on Twitter. Not just as a show or an institution,
dore I see, but as individuals.
Speaker 3 (52:44):
That's right. If you wish to follow my core time activities,
you can do so on Instagram where I am at
how now, Noel Brown, I've been posting a lot of
Dutch oven cooking videos which marry me. I'll interest you.
I made my very first there's lamb Rogan Josh last
night with a big old lamb shoulder that I slow
(53:05):
cooked on the bone in this delicious Indian gravy for
about five hours, and I show like the progression of
it becoming delicious and falling off the bone. It was
a very successful experiment. I'm really excited about that Dutch
of him.
Speaker 2 (53:18):
That's making me very very hungry. Oh my goodness, time
for dinner.
Speaker 1 (53:25):
I think this, Matt, Is this the part where is
this an episode where you talk about your Instagram? Or
is this an episode where where you keep the audience
in the dark as dark as your awesome recording spot again?
Speaker 2 (53:39):
Oh yeah you can. You can follow me. There are
some great updated pictures of my new haircut. Just search
for Richard Blaze on Instagram. You'll find me. You'll see it.
Speaker 3 (53:51):
You cut your own hair, you cut your own hair,
mat or is that you let your your lovely wife
do it, perhaps your young son.
Speaker 2 (53:57):
I haven't touched my hair with shears or any other
cutting implement since this whole thing begins.
Speaker 3 (54:01):
So mainly just tearing it out and madness. Is that
what says yeah, it's all manual. Minds starting to fall
out in clumps. You know, I decaid, don't know. I
think I'm going to emerge from this with a receding hairline.
Speaker 1 (54:14):
I actually I'm actually getting kind of old testament now
with not shaving the beard or cutting my hair. But
what I've been trying to do to have some regularity
during the day is to is to put on clothes
when I talk to you guys, and turn on lights
so that I'm not just a voice of glowing eyes
in the dark. But if you want to check out
(54:36):
my quarantine beard on Instagram, you're more than welcome to
follow me at Ben Bullen on Instagram, at Ben Bullen
hsw on Twitter, wherein I investigate any number of strange,
unusual things and keep you updated on the useless skills
I am honing during quarantine. I don't know if I
mentioned it to you guys on air, but now I
(54:57):
can name all one hundred and eighteen elements the periodic
table and it does not matter. Let me just assure
you no one else bothered doing that. It does not
affect your life in any way whatsoever.
Speaker 3 (55:08):
I think it enriches your life. Ben and I'm I
say kudos to you for that.
Speaker 1 (55:14):
Thank you, thank you if there was an element called
thank you, Neil, which I know there's no.
Speaker 3 (55:19):
No, you know what I did, you guys, this is
my biggest claim to fame during this time. I'm not
gonna say which ones, but I definitely did a whole
day of recordings and zoom calls wearing no pants. Just
waiting that out there. Wait a second, No, I'm pants today. Pants? Okay,
yeah it was. I'm not gonna say if it was
(55:40):
this show or not. I do other shows, but I
definitely had some pretty high level executive producer type zoom
calls wearing no pants, and no one was the wiser
and if it felt like it gave me the upper hand.
Speaker 1 (55:51):
Honestly, you gotta stay seated, you know what I mean,
unless at the very end you want to pull one
of those groves. Oh well, wow, I'm wearing pats.
Speaker 3 (56:01):
Wow, I can verify.
Speaker 1 (56:04):
But so so what if someone has something to tell us?
What if you are listening, you have something to share
with your fellow audience members, but you hate social media?
Speaker 2 (56:17):
What then you can give us a call. Our number
is one eight three three std WYTK we've been going
through a ton of messages lately. Please call us. We
are waiting to hear from you. We we may you know,
we may respond with it a call in kind, or
we might just you know, listen and then talk about
(56:39):
it here. We've got a huge doc now running. It's great,
so please continue to write to us, give us your
thoughts on this episode, any other episode, a future one,
or just things you want to chat about while you're
hanging out in quarantine while we do the same. Please
do give us a call one eight three three st
d WYTK.
Speaker 1 (56:58):
And additional for longtime listeners, we have a show called
Strange News Daily that we'll be moving on to this feed,
so you'll be hearing something from us Monday through Friday
until the lights go out until Wells Fargo disappears. As
for this episode, you'll have to get in line behind Nesley.
Speaker 2 (57:18):
Oh and we're really excited about that show. It's gonna
be kind of like this one, where you're gonna get
lots and lots of researched information packed into a shorter episode,
hosted by our very own Ben Bollen. We think you're
gonna love it. So now let us know what you
think about that show as well as you're calling in
and writing to us and talk to us on Twitter
most boorly.
Speaker 1 (57:38):
It's produced by Dylan Fagan, which was a big get
for us. So we're, you know, like everybody else will
working live. We're rolling with the punches. But there's one
thing that will never ever change. That is this. If
you hate phones, if you hate social media, you can
always contact us about any old thing twenty four to
seven at our good old fashioned email address where we.
Speaker 3 (58:01):
Are conspiracy at iHeartRadio dot com.
Speaker 2 (58:22):
Stuff they don't want you to know is a production
of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app,
Apple Podcasts, or wherever you listen to your favorite shows.
Stuff They Don't Want You To Know News
Hosts And Creators
Matt Frederick
Ben Bowlin
Noel Brown
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