SAN FRANCISCO–Ex-employees of the embattled bank Wells Fargo continue to come forward with stories of being pressured into selling unnecessary products to customers.
In the latest example, employees said they were pushed by managers to sell costly overdraft protection products that many customers didn’t always need and many didn’t realize they were getting.
The issue was also raised during two hearings before Congress where CEO John Stumpf was grilled during testimony.
A Wells Fargo spokesperson told the Wall Street Journal the bank has adhered to a 2010 regulation that requires customers to opt into overdraft protection and that procedures “all clearly demonstrate” to customers that “this is an optional service that requires specific customer consent prior to enrollment.”
In 2010, a Federal Reserve regulation took effect requiring banks to get customers’ permission to opt into a service that would allow debit card and ATM transactions to clear, and a fee to result, even if a checking account doesn’t have sufficient funds.
But, as the Wall Street Journal reported, prior to 2010 financial institutions didn’t need customers’ permission in most states for the service, which can generate considerable fee income. For that reason, the former Wells Fargo employees alleged to the Journal, managers at Wells Fargo pushed branch staff to find new ways to get customers into the service, according to current and former personal bankers and managers in Florida, California, Georgia, Nebraska, Virginia and Texas who were interviewed by the publication.
Oscar Sevilla, who worked at Wells Fargo in Georgia from 2012-2013, told the Wall Street Journal that managers told personal bankers in staff meetings to present debit card overdraft protection as a requirement for checking account customers.
“We just used to say it comes with it to basically suggest that there wasn’t an option,” Sevilla was quoted as saying.
Sevilla is one of six named plaintiffs in a recently filed federal class-action lawsuit in California against Wells Fargo alleging employees were “encouraged and directed” by managers “to use various illegal schemes to open accounts fraudulently,” according to the Journal.