SAN FRANCISCO–How did the account opening scandal at Wells Fargo last for so long and escape notice of the bank’s internal auditors?
A new report says branches were given as much as 72 hours’ notice that auditors were coming, giving them time to put in late nights and even all-nighters to get everything in order and cover up improper practices, such as opening accounts or signing customers up for products without their knowledge, according to the Wall Street Journal.
More than a dozen current and former employees of the bank across California, Arizona and New Jersey, for instance, said they forged or saw colleagues forge signatures on documents or shred papers that could have indicated accounts were opened without authorization, according to the Journal report.
“Often, managers would call for all hands on deck at a branch to stay late into the evening—or sometimes all night—to shred documents or forge signatures if they weren’t there,” some current and former managers told the Wall Street Journal. “For instance, they would go through desks to find signature cards that hadn’t been approved, make sure wire forms had been filled out properly and that documents in a ‘control binder’ like cash or teller audits were filled out,” said Ivan Rodriguez, a former branch banker at Wells Fargo for about six years until 2013. Some branches that opened accounts for customers without the customer present would cut and paste a signature the bank had on file for the customer and add it to the required signature card.”
One employee told the Journal, “You became numb to it. It became pretty normal.”
In 2016 Wells Fargo paid more than $185 million in fines with various government entities for a years-long scheme in which as many as 2.1 million accounts were opened using fictitious or unauthorized information.
In response to the report, the Wall Street Journal reported Wells Fargo initially said it would keep the-24-hour notice of branch visits, but later said it plans to eliminate the practice.