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The Wall Street Journal is reporting that the Office of the Comptroller of the Currency and the San Francisco Federal Reserve are both investigating the sales tactics of Wells Fargo. The regulators are investigating claims that the bank pushed employees to meet difficult sales goals. The investigation began after a lawsuit was filed by the Los Angeles City attorney in May.
The investigation shows a questionable core growth strategy that helped Wells Fargo become the country’s most valuable bank with with more than $280 billion in assets. The Wall Street Journal writes that “the lawsuit alleges that the bank pressured its retail employees to commit fraudulent acts, including opening accounts for people that don’t exist and charging customers for products without permission.”
Wells Fargo claims that its customers use an average of six solutions per household and some areas of the company customers use an average of 10 solutions. Wells Fargo is the only major financial institution that mentions how well it does in cross selling in its securities filing. The lawsuit alleges that high-pressure sales tactics and quotas put customers in solutions that they don’t need or can afford.
You can read the full story on the Wall Street Journal’s webpage.
