Folks, welcome back. We've got a classic episode for you. This one is proudly not brought to you by Wells Fargo.
Unless it is.
Unless it is, and they.
Haven't heard this.
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.
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.
First National Bank of Atlanta into Wakovia, into Wells Fargo exactly.
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.
It was nice to say, you're gonna call you.
These boks were made for COVID and that's just what anyway. Yeah, we'll get to this classic episode afterword from our sponsors.
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.
Hello, Welcome back to the show. My name is Matt, my name is Noah.
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 the first time 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, I see very cryptic.
Matt. I like it.
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. We'll see what happens.
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 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.
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 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.
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, 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 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, 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 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, 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.
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 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.
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 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 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.
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 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 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.
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 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.
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
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. They just won't have it.
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.
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.
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, 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 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 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 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, 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 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
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.
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.
One you go in the office or on a desk.
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 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.
Yes.
Selling.
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, 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 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 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 idea and it sounds normal now, but when he said it, it was pretty innovative.
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 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.
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, the customer or not the client.
I don't think it's pre 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 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 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 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.
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.
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.
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 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 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.
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 track rate as the best seller, right, and then over achieve.
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.
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 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 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. 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, 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.
That's crazy.
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 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 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.
Wait a minute, Wait a minute, isn't that called fraud?
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 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 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.
A terrible place to work, as almost as though it would drive you to do something untoward m exactly.
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, 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. 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.
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, 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, 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 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 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 so Hambick, being a stand up guy, is on the case.
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 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
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 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 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. Is that similar here, benus were making these decisions on their own.
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.
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, 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 give it a name. I think that's pretty interesting and teachable here.
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 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.
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 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. 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.
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.
Probably.
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 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 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.
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.
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.
You know what I'm gonna do immediately following this episode, go through that bank account.
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 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 it.
Check all those bills, keep.
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. 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 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. 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 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.
Wow.
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.
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.
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, 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.
Now that sounds familiar. That sounds pretty dang familiar, you know.
To be fair, they absolutely have plausible deny of ability. 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.
Yeah, it's true.
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 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.
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.
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.
I won't do it. My soul shall not allow boys.
That's fair. I respect that.
So yeah, but you know I kind of started a bank.
Yeah yeah, well yeah, the Ben Bank. The Ben Bank deals exclusively in ben bucks.
Unencumbered by souls. Yeah, also true.
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.
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.
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.
I like it.
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?
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 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 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. 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.
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. 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 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.
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 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 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 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.
You can get special perks guys, right, and now we're family once they have all my info, Look, 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 model.
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 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. 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 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 they did, and you know, imagine feeling that.
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. 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 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.
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 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, 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?
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, 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 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 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
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.
Yeah, it is true. They just.
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. 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 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 through Fifth Thirds back when I owned a house in Athens years ago. That's fascinating. Now that's news to me. Yep.
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 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 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
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.
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 a world in which banks can be brought down. I don't think this is gonna be it right.
You know, for reasons.
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.
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. Because the thing here is again you really they could easily argue, well, yeah, no law against having aggressive sales goals, you know.
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 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. 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 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.
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 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.
That's making me very very hungry. Oh my goodness, time for dinner.
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?
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.
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.
I haven't touched my hair with shears or any other cutting implement since this whole thing begins.
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.
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 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 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.
I think it enriches your life. Ben and I'm I say kudos to you for that.
Thank you, thank you if there was an element called thank you, Neil, which I know there's no.
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
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.
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.
Wow, I can verify.
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?
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
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.
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.
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.
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.
Are conspiracy at iHeartRadio dot com.
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.