Received via email for publication at 11:11 AM EDT. ~ Dinar Chronicles
It appears investment legend Warren Buffett might have brought a new plague upon new Wells CEO Tim Sloan with his recent comment: “There’s never just one cockroach in the kitchen.”
And the following scandals all attached to Wells Fargo’s reputation since 2009 might explain why:
Because Wells Fargo is the third-largest bank in the US, as such it committed crimes against the entire nation when it opened 3.5 million fake accounts from 2009 to 2016 — 70% more than the 2.1 million Wells Fargo had previously estimated.
Wells Fargo even admitted that 528,000 customers that supposedly signed up for online bill payment did so without their authorization, and will refund over $910,000 in fees to those customers.
This had explicit echoes of Wells Fargo’s previous massive scandal, opening up to 2.1 million unauthorized credit-card, checking and savings accounts in branches across America from 2011 to 2015.
Such a public and mass scam led to the eventual resignation of CEO John Stumpf, and the firing of more than 5,300 employees, a $185 million federal fine and a settlement of a class-action lawsuit that will cost at least $142 million.
Well Fargo’s corporate accounting firm, Price Waterhouse Coopers, was also secretly told by former Chairmen of the Board Stephen Stranger not to report an additional seven-year period from 2002 to 2009, during which Wells admitted back in April 2017 it had also opened fake accounts–creating the need for a new $32 million civil class-action settlement, including the period right after Wells purchased Wachovia Bank (2009).
By omitting this sizable time period, Wells Fargo was attempting to cut off full restitution for defrauded customers and preventing the true scope of their fake-accounts scandal from being known.
However, improperly creating such accounts without customer consent was not only confirmed by former bank employees, who blamed the scandal on an internal high-pressure sales culture, but openly encouraged and demanded by senior management despite internal staff complaints about the fraudulent sign up practices.
The New York Times reported last month
the paper had received internal documents showing the San Francisco-based financial giant Wells Fargo Bank had charged more than 800,000 customers with fraudulent auto loans for GAP insurance they didn’t need or agree to purchase.
The result was more than 270,000 auto loans became delinquent with more than 24,000 vehicles repossessed.
Wells Fargo released a statement last month admitting that roughly 570,000 customers were signed up for and billed for car insurance that they didn’t need or knew about. Many couldn’t afford the extra costs and simply fell behind in their payments and this is why their cars were repossessed.
Wells Fargo was scheduled to refund $2.8 million to customers, in addition to the $3.3 million it already agreed to pay. That number has grown as high as $6.7 million all to be paid out as of August 2017 per the latest class action lawsuit.
Wells Fargo secretely and manipulatively modified thousands of home loans to profit from unknowing customers by lowering their monthly mortgage payments, while at the same time increasing their loan term length (more months) as well as increasing their interest some as much as 40%.
And because changes to any payment plan for a person in bankruptcy is subject to approval by a court with all interested parties involved, Wells Fargo knowingly put forth additional bankruptcy modifications without client approval for a second time after assisting putting them into bankuptcy, this according to several lawsuits brought against the bank.
Wells Fargo stood to profit as much as $1,600 from every government program they adjusted, no matter how many times they adjusted it!
This is not the first time Wells Fargo has been accused of wrongdoing related to payment change notices on mortgages it filed with the bankruptcy courts.
Under a settlement with the Justice Department back in November 2015, the bank agreed to pay $81.6 million to borrowers in bankruptcy whom it had failed to notify on time when their monthly payments shifted to reflect different settlement dates for increased real estate taxes or additional insurance costs.
In that 2015 settlement, Wells Fargo agreed to change its internal procedures to prevent future violation, which at the time affected 68,000 homeowners.
Board of Directors
The latest scandal almost certainly is behind an announcement that three veteran Wells Fargo board members are departing, including former Chairman Stephen Sanger. It strongly suggests a companywide cultural problem built on the idea that customers should be treated like profit centers.
In Congressional hearings earlier in September of 2016, Senator Elizabeth Warren, a Massachusetts Democrat who is on the Senate Banking Committee, also reiterated her request that the Fed
real government oust 12 of Wells Fargo’s 15 directors, saying they had violated their duties to oversee risk management at the bank in the period when the improprieties had taken place.
And when former CEO John Stumpf openly lied to Congress, under oath, when he stated that the bank’s internal fraud issues were all “cleaned up,” and there were no further fraudulent practices engaged by Wells Fargo in that same time period.
Not only was he not imprisoned, he was given a $130 million severance package in his subsequent shamed departure from the bank.
Berkshire Hathaway, a Warren Buffet controlled investment house going back to 1962, is the largest owner of Wells Fargo stock.
Wells Fargo is the second largest owner of Berkshire Hathaway stock. Meaning, they’ve been in bed together long before this scandal ever started, and will be long after per his own words in the below interview:
So Warren it is true, there are many cockroaches in the Wells Fargo kitchen… of which you are the
largest and most grotesque.
God is with us