Wells Fargo was fined million of dollars and fired thousands of employees because the employees opened fraudulent accounts, but one question remains: why did the employees do this and what can banks do to stop it?
The financial incentive for employees to open as many credit, checking, or savings accounts as possible can lead to banking law violations, which is what occurred at Wells Fargo. (RELATED: Wells Fargo Just Got Hit With The Biggest Fine In CFPB History)
The fraud usually occurs with “either the low-level bankers or call center folks who are paid either low level hourly wages (above minimum wage) or sales based commission tied to the number of accounts they open,” said a high-level bank employee in an exclusive interview with The Daily Caller News Foundation (TheDCNF). The employee in question wishes to remain anonymous.
Bank employees are paid such low wages that their only option to receive a bump in income is to open up more accounts, even if this means opening fake or phony accounts.
The banking industry as a whole is consolidating their operations into call centers in the middle of the country. Big banks are moving to the heart of America where they can adjust cost of labor downward and achieve higher worker volume, the bank employee tells TheDCNF.
All of the “Big Four” banks, specifcally, JP Morgan, Citi Bank, Wells Fargo, and Bank of America, are making moves to the Midwest.
For instance, JP Morgan Chase is moving some major operations to a building in Columbus, Ohio. The Chase building is actually the second largest building in the nation, smaller only than the Pentagon, the former bank employee tells TheDCNF.
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