Wells Fargo's Imaginary Customers

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

Speaker 1 (00:00):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn the stuff they don't want you to know. A
production of I Heart Brading. Hello, welcome back to the show.

(00:26):
My name is Matt, my name is Nol. They called
me Ben. We're joined as always with our super producer
Paul Mission controlled deconds. 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

(00:47):
at least Matt, you and Nol. It's first time I'm
spoken with you. Paul and I go way back today.
How's it going, guys, It's 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. Really anything to write home about, not yet, No,

(01:08):
I see very cryptic Matt. I like it, and I'm
in trigue. I too, have had some unusual phone calls
with people that I have never met and may never mean.
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
one once again, because that's fun. It's fun to go

(01:30):
other places. We'll see what happens. Yeah, I'm actually doing
some I'm doing some runs later today too. You know,
if people are immuno compromised, it's a tremendously bad idea
for them to leave their house, even if they're in
an area like Georgia where the local leadership is attempting

(01:51):
to open up various businesses and institutions. So I'm gonna
go do some no contact drop offs. If you are
immuno compromised, please please, please still don't go outside, even
if everything else is open. It's just not worth it. Yeah, guy,
I know in Brooklyn um who got COVID nineteen. It
was a mild case, but he just got the go

(02:13):
ahead from his doctor to to leave the house. And
he put it was his birthday today actually, yeah, so
happy birthday. I'm not gonna say his name because he
may not want to people to know that he had
the thing, but happy birthday to you, my friend, Um,
and really glad to see you getting out. And he
had he had a mask on, was keeping it super safe.
But um, yeah, it's gotta be tough, you know, just

(02:34):
like having that level of isolation, especially if someone lives
by themselves. And speaking of crises, Uh, 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,

(02:58):
I think, by the time people reached the age of
let's say, I don't know, arbitrarily eighteen, they've already experienced
several huge behemoths of financial crisis. But individuals and countries
around the world right now are being told to shore
up their finances and they're being chastised for quote unquote

(03:19):
poor financial planning, while at the same time, billion dollar
corporations are getting bailed out left, right, over and under.
Some people would call us the way of the world.
Some would call it a series of conspiracies. Yet the
world of finance and conspiracy, they're they're inextricably intertwined. You know.
You could even say the concept of money itself is

(03:42):
a conspiracy. As a matter of fact, we have said
that on previous episodes. Uh, and I stick to my
guns on that one. Banks have been accused of multitudes
of financial crimes, many conspiracies and even at times assisting
with things like government overthrows or kudatas. This is not
to say that all banks are all bad right for now,

(04:04):
they are a necessity. Billions of billions of people rely
on banks in some way, and 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 to to get you to the

(04:25):
point of today's episode, we have to first briefly explain
how banks work. It sounds super simple, but there are
there are a few misconceptions we need to bust, and
there's some things that will discuss that might surprise you.
But don't take our word for it. Here are the facts. Yes,
the bank itself, the institution, the thing that we all

(04:46):
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 laying in
a drawer somewhere, that weird paper like substance that has

(05:08):
some images on it. If you don't believe that thing
is worth what it's worth, then it isn't a thing. Yeah,
it's like fairies. Like if you don't believe in tinker Bell,
then she dies, you know 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 its
substitutes and provides other financial services. So really think about

(05:32):
it this way. Banks take in deposits money and then
they loan out money and derive a profit from the
difference in in in the interest rates that are paid
and charged respectively. So when you think about that, like
how much money they can make by lending money money
out and then charging interests on that money they're lending.
But the big thing here to remember is that in

(05:52):
order to have money to lend out, they have to
be taking money in. But make no mistake, I mean,
the bank isn't really build for you. I mean it's
it's a it's a business. It's designed to make money,
uh for the shareholders. Um, So it's primary function really
isn't to be some sort of you know, safe haven

(06:13):
for your money. That's almost like an afterthought. You're really
just feeding the machine with your money, and then 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

(06:36):
that account to pay bills and write checks, et cetera.
Who still writes checks. I had to get 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. That's the weirdest thing. But yeah,
that amounts then deducted from your account balance, and you can,
you know, theoretically earn interest on that balance. Uh, and

(06:56):
that can actually be added back to your account. This
is all kind of one oh one banking basics here. 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

(07:18):
day one stuff, it is a huge misconception that is
very distressingly common. The bank's primary purpose, as far as
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 an interest where
banks you know, want to make more, uh more revenue.

(07:40):
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. Uh. 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, uh. The amount of interest that you get

(08:02):
when you're checking account or your savings account. In the
big picture, it's peanuts. It's 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

(08:23):
all at once, because you see that, yeah, you see,
the banks won't have it. They just won't have it.
I mean, it's essentially a I mean, like 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,

(08:45):
if you go back and say I want my money,
shouldn't be able to catch your money. But if everyone
does at the same time, then it's not gonna work out.
And yet we trust in this system because it's somehow
backed by some kind of promise by the government or
the f d i C or what have you. Yeah,
and that's what's happened in Russia right now as we
record this, which is just just for peak behind the
curtain right at the very end of April. So and

(09:10):
this can happen again in 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,
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 why do I matter? Well, there are

(09:31):
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 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

(09:53):
one bank, you are far far more likely to have
a credit card account with them a savings account we're
alone with the as well. And these accounts all have
differing terms, and depending on a ton of mitigating factors,
one person may have a much better deal than another. Right,
some people have credit cards with maybe what like nine
percent interest, and other people have credit cards like twenty

(10:15):
five point nine 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
Jack who just has a checking account. 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,

(10:37):
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 or some ungodly amount,
And honestly, I'm not to that degree, but I'm one
of those in terms of laziness. I have had a
bank account, um that has changed hands like three times

(10:59):
throughout the course of my my financial life, and I'm
just kind of stuck with whatever it ended up being, um,
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 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

(11:20):
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. I I yes, and you know,
I mean 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

(11:43):
experience you go in the office 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

(12:07):
get me to open 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. Yeah. The uh, the concept is so
common that there is a name for it in the industry.

(12:29):
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. Uh, it is a term that
is in the public sphere. Success for okay, so Wells
Fargo or Wacovia or you know, five Thirds Bank or whatever,
any bank that you used to, any bank that you

(12:51):
walk into and have a checking account with and so on. Uh.
Those are what's called retail banks. And for a long time,
success it reads tale banks was measured by how successful
the bankers or the even the people on the phone
were at cross selling. And that's encouraging a customer. Remember

(13:11):
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 us 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 Covica Chick. He's a he was

(13:33):
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 eight, I
think with Vanity Fair maybe where uh he summarizes his

(13:55):
idea and it sounds normal now, but when he said it,
it was pretty innovative. Yeah, he really kind of changed
the lingo, the lingo of banking. Um, he started referring
to branch employees or the idea of tellers, called them salespeople, uh,

(14:15):
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 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 cells you're talking about,
are referred to as products, which I find very strange.

(14:39):
You know, it's such a non tangible thing, like insurance
being a product. 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

(15:01):
it's also that you can offer exactly what the customer
needs or the uh yeah, the customer. I don't think
it's for convenience, 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

(15:21):
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,
just offer me the 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

(15:42):
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 dealers, and
I'm sure many of you were great, most of you even,
but this one in particular, I felt very kind of
bent over a bear a little bit. And I got
them down to where I wanted to be, but I
felt kind of itchy. The whole thing made me feel
I didn't want to do business with them anymore. Yeah, yeah,

(16:03):
it's gonna The anecdote I always think of is like,
imagine you walk into a fast food restaurant and you, uh,
you order I don't know, a cheeseburger, and they're like,
all right, um, do you want poop on your cheeseburger? Why?
Why is that part of the conversation now, I don't
even want the burger cheese. Well, look, we gotta get

(16:24):
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. We'll give you a loyalty card, how
about an Amazon gift card? So so that's I mean,
it's true. Now, 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 the

(16:48):
word correctly. Yeah, but I think what it's I think
what it's really meant to do is to make things inconvenient,
to make it more difficult to find the right deal.
The options are arcane by design, you know, just like
a life insurance or just like a a lot of

(17:08):
medical insurance or health insurance plans function that way. That's
just that, that's just a byproduct of private industry trying
to maximize profit because a lot of people won't do
the research. Wells Fargo, it was really really good at
this They were considered for some time and not in
significant amount of time, the best cross seller in the

(17:30):
retail banking game. But that was one problem, I know,
just one. Uh maybe yes, 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,

(17:56):
you have to continue your track rate as the best seller. Right,
and then overachieve, not to mention. You want to get
that set of steak knives, you know, uh, And and
the coffee is for closers, so you you want to
get coffee. You don't want to get cut off. You
need that stuff to sell, right. It's the unsustainable unsustainable

(18:17):
growth model, exponential growth model of capitalism year over year,
and it applies to a lot of industries. So, I mean,
that's why I was gonna say it was. 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 a lot of new customers,
cross selling, but these accounts, it turns out we're made

(18:41):
up out of thin air. What are we talking about.
We'll tell you after a word from our sponsor. Here's
where it gets crazy. So let's say you don't have
enough accounts, Well, why don't you make them up? As

(19:02):
early as twenty eleven, so 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 uh level on down. They were supposed
to measure up to these incredibly difficult sales quotas, these

(19:26):
cross selling quotas, These were cartoonish, lee implausible. Vanity Fair
in fact, noted that several of these goals were proven
to be literally mathematically impossible to achieve. That's nuts. Like,
even if you pitched everything to everyone, every single customer,

(19:48):
got every single offer possible and they all said yes,
you still wouldn't meet the quota at some points. That's crazy.
That's crazy. It so so. Imagine that you are let's
say a bank manager or one of the main sales
persons at their you know, bankers, or just salesperson at

(20:10):
the bank. Imagine that you are aware that you are
expected to sell x number of new accounts or open
x number of new accounts, and you own you know,
you see like you literally physically see x minus fifty
people a day, right, so you know that there's no

(20:32):
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
well you do, if you can get a raise at
some point, if you can keep your job even um, well,
they started doing something that they weren't supposed to and
that's just opening new accounts that would count towards their quota,

(20:56):
but wouldn't actually be tied to somebody who wanted a
Wait a minute, wait, isn't that called fraud? Ding ding ding? Yes,
it is. Indeed, there there was a 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.

(21:18):
Was his career, he was. He got into banking as
a young cat before all these massive consolidations, right before
the financial whales starts swallowing the other smaller financial fish,
and well whales are mammals. But you you get it,
you know what I'm talking about. So he said this
in a quote, just to hammer home that point, um

(21:42):
that you made, Matt, about how intense this pressure was.
He said, every morning we had a conference call with
the managers. You 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 explained how you why you didn't make it,
and how you were going to fix it. It was

(22:02):
really tense. Uh. So you can imagine that, you know,
there's a little problematic if we're being like a terrible
place to work, as almost as though it would drive
you to do something untoward exactly well, it's it's like,
think about this, like, imagine you go to uh, let's

(22:25):
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 him,
and you're gonna get them delivered. Later, you learned that
the store did not just sell you a leaf blower
and your favorite screwdriver. They also sold you a chainsaw,

(22:48):
a router, two cases of blue power aid, maybe some
outdated lamp fixtures, and they threw in a lawn gnome
and they charged you in some way for all of it.
And now imagine that delivery h took months or years,
and you didn't find out about it until much later.
This sounds silly, right, It's like an arrested development sitcom
esque thing, but that's pretty much what happened in this scenario.

(23:12):
In real life, this happened to people at Wells Fargo. Yes, Ben,
the UH, the routers, and power aid 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

(23:32):
they're talking to you on the phone as a customer
and they convince you to take out a large loan.
Let's say, let's say a ten thousand dollar 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 dollar loan, but

(23:53):
on paper, and according to the bank, they're going to
get credit for taking out a ten thousand dollar loan,
and it's just a way for them to sustain themselves
within the banking infrastructure. And that is most certainly an
unsustainable thing. Yeah, yeah, it's um I like the point
you made about Ponzi scheme, Noll that was occurring to

(24:13):
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 Hamdback, who he mentioned earlier, and he's befuddled and
he's kind of indignant because he says, hey, Dennis, uh,

(24:38):
I see that I have a checking account and as
savings account, and they like date back to five years ago.
I didn't ask for them, and I don't want them.
And so Hambig, being a stand up guy, is on
the case. Yeah. I think it's interesting. I mean, it

(24:59):
really is some pretty serious, serious slew thing. He looks
into it and discovers it. The banker who opened those
accounts um as 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,

(25:20):
which sounds like a really walky like vanity license plate
if you ask me, uh and to boot. The date
of issuance was January one, two thousand, which was a
holiday when the Department of Licensing of Washington State would
have been closed. And Hambag is is not letting this
go um. He kind of is getting the brush off

(25:43):
for management. So Handback retires. I think he was just
kind of fed up because he, you know, he he
was the one that was looking into this and he
was the one that was finding some very fishy evidence,
and he he wanted to avoid being fired for not
resorting to these kinds of fraudulent activities in order to

(26:07):
make those unrealist expectations. And 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 almost more
or less implied that, you know, put up or shut up,
like you're out if you don't meet these expectations. And
there's sort of like there was a big cheating scandal

(26:27):
UH in UH 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
like their superiors instructed them to cheat. Is that similar here, Ben,

(26:48):
Individuals were making these decisions on their own. Yeah, they
were heavily incentivized to make those decisions. I think I
think that's a great comparison because the the the thing
about is it would be illegal for the banks and
the executives to come out and say, look, make up
these accounts and break the law. As a matter of fact,

(27:09):
you know, we said Handback refused to play the game.
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

(27:31):
aren't you meeting these sales quotas? Uh, your job is
in jeopardy. And usually that's all the incentive people need.
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 David
a name, I think that's pretty interesting and uh and
teachable here. Yeah. Yeah, it's just like the frozen grape

(27:55):
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 it's
exactly like that. And to quote to quote Yates from
the Second Coming, the center could not hold right or
to paraphrase of this was unsustainable and very very soon

(28:19):
things would fall apart. Will explore the fallout which continues
today after a word from our sponsors, and we're back
talking more about banking, because it's it's not as boring

(28:40):
as it might seem. You guys, there's some pretty shady
stuff going on at Wells Fargo. Uh. Their own analysis
that they did between found that its employees had opened
more than one point five million deposit accounts and more
than five hundred and sixty five thousand credit card accounts

(29:00):
that may or may not have actually been real. Uh.
But but then we we can't forget. And this is
always the point that when when I thought back on
this story, these weren't like made up identities. These were
like duplicate accounts of real people. What do they How
do they think this is? That they're gonna get away
with this for very long? It just seems like such
a desperate move, which clearly it was. It feels like

(29:23):
one of those things that you get away with until
you can't, and you sustain what you've got, and what
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. Probably. It's like the boiler room.
You remember that film. Yeah, I think I just like

(29:46):
the Boiler Room. I don't know I'm mentioning that, but
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 uh, they
would they would be asked to pay these fees on
accounts that, as far as they knew, did not exist.

(30:07):
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 time they would find out about one of
these fraudulent accounts is when they were getting shaken down

(30:28):
by a collections agency. So just imagine what that does
to your credit as well. This has lasting financial consequence
for people totally. And I mean I think that, you know,
I'm just guessing here that Wells Fargo h 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. You know, I

(30:48):
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 with like
a fine tooth comb. 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 think something's up right.
You know what I'm gonna do immediately following this episode,

(31:09):
go through that bank account a lot of people while
you're there, Go ahead and check uh just in general,
fellow listeners, go ahead and check your uh 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 uh voted again number

(31:34):
one most stated company in the US. That's not my opinion,
that's a fact. Yeah. Yeah, Just whoever your ISP is,
really it doesn't matter. Just check in check all those bills,
keep an eye on them because those plans change, right,
and they're meant to change in ways that you might
not be aware of unless you are paying mindful attention.

(31:55):
So this gaming, as they called it, this unethical behavior,
was so ubiquitous that it even created related kind of terms,
slang terms internally. There's one called penning, and that meant
assigning customers pen numbers without their knowledge. That's incredibly disturbing because,

(32:21):
as you know, a pen number is supposed to be
your it's it's like it's sacro sanct it's the Uh.
It's similar to a banks version of your Social Security number.
No one else is supposed to know it. But if
someone makes up a pen 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

(32:44):
in all all sorts of quote unquote products without your knowledge.
So boom, now you've got auto insurance boom nwing out
a car. Loom boom nwing out a credit card. Uh.
And this was nuts, because the most mystifying thing about
this still is not even how widespread it is uh
to me, it's how blatant it was. Uh. The l

(33:05):
A City's attorney office found that there were one nine
three thousand non employee accounts open between twenty eleven, and
and get this, the only email name listed for them
was Wells Fargo dot com just just at Wells Fargo
dot com. Wow. Wow, it's not like not even trying,

(33:29):
you know, it's like and I even 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 Dorganson,
that's not a real name. That's still better than Wells
Fargo dot com. Or you get even if you just
put like c U S t as in customer and

(33:50):
then put a string of like, you know, numbers and
letters or something. It's that easy. Cheez. But that's six time.
And I guess you had to make so many so quickly. Yeah,
they did, going to that point of desperation, you know.
And on September eight, Wells Fargo did settle with some authorities.

(34:16):
They paid a 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, and
the City and County of Los Angeles. They wanted to
settle the charges of massive fraud. As part of this agreement,
they were able to avoid admitting that they had done

(34:39):
anything wrong. Now that sounds familiar, That sounds pretty dang familiar,
do you know. To be fair, they absolutely have plausible deniability.
The only thing they were guilty of was having high standards.
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. It's true. I think

(35:01):
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 five million dollars. They fired, Uh,
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 were sacrificial goats just

(35:23):
sort of meant to be a propitiation. They were. They
were meant to appease the gods of regulation. And we
know what you're all thinking. You know what everybody is thinking. Hey,
a hundred and eighty five million dollars is um, there's
a big deal to me. But isn't that chump change
for such a huge bank. The answer is yes. It

(35:45):
was about three right of second quarter profits of that year,
So there are four quarters. One of those quarters had
to shave off three in order for them to be Okay,
that's crazy. It's also uh way less than some executives
have made over the past five years. Um, gentlemen, I

(36:09):
propose that we uh 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. I won't do it. My soul shall
not allow boys. That's fair. I respect that. Um so yeah,

(36:29):
but you know I kind of started a bank. Yeah yeah, yeah,
the Bend Bank. The Bend Bank deals exclusively in ben bucks,
unencumbered by souls. Yeah, also also true. But you know,
so you then you understand ben as as the head
of the Bend Bank. This is all just the cost
of doing business, my guy, right, yeah, yeah, I want

(36:50):
to say, um, in case this plays in court later, uh,
technically I am not on the executive board. I am
a consultant, so nice try. For the record, that was
me lapsing into my douchebag executive voice when I said,
my guy, there, I just had to had to walk
that one back a little guy. Yeah, I just you know,

(37:13):
it has to be tongued 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, 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

(37:38):
with it, because this was I mean this literally is
a cost of doing business. They didn't admit wrong doing.
They had plausible deniability. In short, this bank, I thought
they got away with it until that is, employees like
handback started coming forward, and there's there was a list
of employees who complained internally, because like any large institution,

(38:03):
there are channels through which you're supposed to send your complaints.
The list of employees who are skized out by this
and complained, uh it stretches back over ten years. People
knew what was up, you know. Like again, we're it
might sound like we are vilifying Wells Fargo, but we're

(38:23):
talking about the crimes of an institution. Really, we're not
talking about any of the employees in the banking industry.
We're not talking about any of the employees and Wells
Fargo specifically, right, These these people are not the ones
who said make these impossible sales quotas. Yeah, so as
of this year, UH UM Wells Fargo has agreed to

(38:48):
three billion UM and settlements UH for criminal charges and
a civil action that's stemming from its widespread mistreatment of
its customers, UM and it's community bank over a fourteen
year period. UH. Court papers show that prosecutors described the
insane environment that Ben I mean, honestly, I was responding

(39:10):
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 a uh you described it been in
your notes as a pressure cooker environment that was kind
of created, this absolutely toxic work environment, right so to

(39:32):
very low level employees. Yeah, absolutely, this is UM. This
is I. I don't know. We've got a lot of
people in the audience who have worked in sales jobs
or something with commission UM. I don't know if you
guys have ever done that. I have not, but it
feels like a very demanding situation to be put in,

(39:56):
even when there's you know, absolutely no unethical behavior. UH.
Most commission 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 UH and
employees under when they ask you this series of questions
and a purchase, like have you ever bought something? And
you know, you're just buy one thing you need like

(40:16):
maybe a 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. Yeah, I always say I'm good, Like
when they asked for my phone number or email. No,
I don't ever want anyone to have that because there's

(40:38):
no reason for it. They act like it said, oh
so we can better serve you next time, or have
you in my database and know what you like. I
don't know why anyone would ever give out their information
at a at a brick and mortar store like that,
because you can you can get special perks guys, right,
and and now we're family. Once they have all my info,

(40:59):
just give 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 adell. Yeah,
well so 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

(41:25):
quarterly meeting or a meeting with your company where everybody
gets together and they talk about the state of the
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, uh, your local chain of the bank,

(41:46):
and your manager. You guys didn't meet up to the standards,
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 have had
a great job. Then over this meeting, in this call,
or however it goes some other branch, you know, let's

(42:08):
say dozens of miles away, for some reason, they exceeded
this goal 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

(42:30):
to the to this particular group, to this bank and
do what they did. And you know, imagine feeling that. Yeah,
then those those people who were meeting these increasingly difficult
sales goals, uh, they were the minority uh for a while,
you know, and fairly often, and they often had to

(42:53):
achieve these things through unethical or illegal means. So that's
where we are. You know, as you said, all, that's
February of twin twenty, just a few months ago. What
lessons were learned from this retail bank conspiracy? Again, not
a theory, it's a conspiracy. Here's the thing. Part of
that deal with that three billion dollar price tag includes

(43:17):
a deferred prosecution agreement. That's ah, that's an agreement, a
packt that could. The positive way to say it is
that the bank could get further criminal or civil charges
if it engages in new criminal activity. So basically, pay
US three billion dollars no criminal charges. But you're in

(43:39):
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, smarten up. You know, we
got our eye on you. Um, yeah, it's true, It's wow.
I just I can't believe that they're around because I

(44:01):
guess you know, they're one of those too big to
fail organizations, right, So it's like, I just I don't
know how you get away with this, and how people
didn't do as you said, Ben and just pull all
their money out. Yeah you know, I mean, And and
even though this is its ongoing, it feels even to
me kind of like a distant memory. I just feel

(44:24):
like the attention span for stuff like this, uh, for
consumers is often pretty short, and if it doesn't actually
affect me personally, 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
a new bank account, but it's slightly inconvenient in them right,
and you know there are I don't know about you guys,

(44:47):
but I will go to extraordinary links to avoid any
slight inconvenience. I like a lot of people out there,
I would like to play life on easy mode. It
barely ever happens, but it's it's nice thought. Uh, you're right,
there was a run on the bank, but it wasn't necessary.
I mean, there was a lot of terrible pr fallout

(45:09):
from this, and they went into overdrive on the Bernets front.
But a lot of investors reacted because remember they're 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 uh five million dollar fund
to compensate the investors who took a hit. Uh what

(45:33):
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 asterick that five million dollars is included in that
three billion dollars settlement total, so it's not like they

(45:53):
paid three billion dollars and then five million again. And
this leads us to the conclusion as it is, you know,
to 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, uh,
this will not happen again. This was, you know, somewhere

(46:17):
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. Yeah,
it is true. They just they forced it to happen
without realizing it. Let's say, but here's the deal. It's

(46:41):
not as the Wells Fargo is acting alone. We've all
talked about before the Waucovia dealings and the problems that
they had before they were absorbed by or i guess
bought out and absorbed by Wells Fargo. The problems with
other major banking institutions, including very similarly, a little regional

(47:02):
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 uh they have roughly a d fifty
billion dollars in assets. And guess what they're accused of
the same thing, pretty much the same thing. Yeah, I
didn't know anything about that one. Actually had my mortgage

(47:24):
through fifth thirds back when I end the house uh
in Athens years ago. Um, that's fascinating now that that's
that's news to me. Yep. Uh. They've been accused of,
as you said, Matt, the same thing right now. The
litigation is ongoing. Uh, 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,

(47:48):
we passed the torch to you because there is a
dilemma here. It's a big problem and something worth 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,

(48:12):
we've had people right in before, uh talking about, you know,
from our cash List 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 multibillion dollar fine punishment enough?
Are the banks, like you said, no, are they truly

(48:35):
too big to fail even when they're caught red handed cheating?
And you know to that point that I think you
had been making earlier to Matt, what what would the
appropriate punishment be if this is not appropriate? Uh, I'll
tell you yes, Ben. You remember, you guys remember an

(48:56):
episode we made quite a while back where we interviewed
Robert Maser infiltrator, the infiltrator, the guy who helped bring
down an international bank because they were caught money laundering
for cartels. So I I think I think there is
a world in which banks can be brought down. I
don't think this is gonna be it right for reasons, um,

(49:28):
but I guess we we have ourselves experienced and uh,
you know, just through our interview and our connection with
Roberts that it is possible for a bank caught red
handed to be brought down, but it 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

(49:51):
was like, it really 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, because the thing
here is again you really they could easily argue, well, yeah,
I mean no law against having aggressive sales goals, you know.

(50:11):
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 spent because I you know,
I was thinking when we're talking about doing this episode, Uh,
I was thinking, what's what's going to happen? People are
listening to this and they hear a Wells Fargo add

(50:34):
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.

(50:55):
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. You know, we want to hear
from you. You're the most important part of this show

(51:16):
that remains 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, dare I say, but as individuals. That's right.
If you wish to follow my core time activities, you

(51:37):
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 married me interests you. I made my
very first lamb rogan Josh last night with a big
old lamb shoulder that I slow cooked on the bone
in this delicious Indian gravy for about five hours, and

(51:58):
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 oven. That's making me
very very hungry. Oh my goodness, time for dinner. I
think this mad. Is this the part where is this
an episode where you talk about your Instagram or is
this an episode where where you keep keep the audience

(52:23):
in the dark as dark as you're awesome recording spot again?
Oh yeah, you can. You can follow me. Uh. There
are some great updated pictures of my new haircut. Just
search for Richard Blaze on Instagram. You'll find me. Uh,
you'll see it. Did you cut your own hair? You
cut your own hair? Matter is that you let your
your lovely wife do it, perhaps your young son. I

(52:46):
haven't touched my hair with shears or any other cutting
implement since this whole thing begins mainly just tearing it
out and and and madness. It's mine starting to fall
out in clumps. You know, I just said, I don't know.
I think I'm gonna m from this with a with
a receding hairline. I actually, uh, I'm actually getting kind
of old testament now with not shaving the beard or

(53:08):
cutting my hair. But what I've been trying to do
to have some regularity during the day is to uh
is to put on clothes when I talk to you guys,
and turn on lights. Uh. So not just a voice
of glory and eyes in the dark. Uh. But if
you want to check out my quarantine beard on Instagram,
you're more than welcome to follow me at Ben Bullen

(53:29):
on Instagram app been bullying hsw on Twitter where and
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 can name all one hundred
and eighteen elements on the periodic table and it does

(53:49):
not matter. Let me just assure you no one else
bother doing that. It does not affect your life in
any way whatsoever. I think it enriches your life, Ben,
And I'm I say, does to you for that? Thank you?
Thank you? If there was an element called thank you,
neon which I know there's no. You know what I did,
you guys. This is my my biggest claim to fame

(54:12):
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. Um just doing that out there.
Wait a second, now, I'm pantsed today pantsed it was.
I'm not gonna say if it was this show or not.
I do other shows, but I definitely had some pretty

(54:32):
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, Honestly, you gotta
stay seated, you know what I mean, unless at the
very end you want to pull one of those Oh
I'm wearing pants, I can verify, but so so so

(54:54):
what if someone has something to tell us? What if
some what if you are listening you have something to
show air with your fellow audience members, but you hate
social media? What? Then you can give us a call.
Our number is one eight three three s T d
w y t K. We've been going through a ton
of messages lately. Please call us. We are waiting to

(55:17):
hear from you. Uh. 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 it here.
We've got a huge doc now running. Uh, it's great,
So please continue to write to us, give us your
thoughts on this episode, any other episode, a future one,

(55:38):
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 w y t K. And additionally, for long time listeners,
we have a show called Strange News Daily that will
be moving on to this feed, so you'll be hearing
something from us, uh Monday through Friday, and all the

(56:00):
lights go out until Wells Fargo disappears. As for this episode,
you'll have to get in line behind nest Lee. 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 Bowland. We think you're
gonna love it. So now let us know what you

(56:21):
think about that show as well as you're calling in
and writing to us and talk to us on Twitter.
Most importantly, it's produced by Dylan Fagan, which was a
big get for us. Uh 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,

(56:42):
you can always contact us about any old thing twenty
four seven at our good old fashioned email address where
we are conspiracy at iHeart radio dot com. M m hmmm.

(57:11):
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