Wells Fargo May Still Be Under Fire, But Customer Deposits Continue To Grow Anyways Bankrate.com Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Jeff Bukowski/Shutterstock March 13, 2019 Kelly Anne Smith Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Wells Fargo CEO Tim Sloan faced tough scrutiny in a hearing with the House Financial Services Committee on Tuesday, . The big bank faced questions regarding its past “egregious consumer abuses,” as described by Rep. Maxine Waters, chairwoman of the committee, in her opening remarks. Waters referred to Wells Fargo’s track record of “harmful actions,” including opening millions of unauthorized accounts, charging service members illegal fees and unlawfully repossessing their vehicles. While has been sitting in the legal hot seat for nearly three years now, it doesn’t seem to be making much of a difference: business at the bank has continued to increase, despite the rolling controversy and bad acts. A brief history of Wells Fargo s scandals
Wells Fargo is the fourth-largest banking chains in the U.S., with . According to data from the Federal Deposit Insurance Corporation (FDIC), Wells Fargo’s deposits have increased despite its recent poor publicity. From June 30, 2016 to June 30, 2018, the bank saw a 10.89 percent increase in total deposits across the country. Primary consumer checking customers have also grown year-over-year for five consecutive quarters, . The numbers reveal an interesting trend. Despite Wells Fargo’s scandals and public relations challenges, there doesn’t seem to be much of a negative impact when it comes to acquiring and retaining customers. Scrutiny over sales pressure
Wells Fargo’s sales-pressured culture has been documented well before its scandals broke. E. Scott Reckard of the Los Angeles Times, one of the first journalists to expose the bank’s pressurized culture, noted in 2013 that Wells Fargo (at the time) was the nation’s leader in selling add-on services to its customers. found the success came at a cost. “The relentless pressure to sell has battered employee morale and led to ethical breaches, customer complaints and labor lawsuits, a Times investigation has found,” Reckard wrote. It wasn’t until 2016, though, when Wells Fargo came under legal fire. Federal regulators revealed employees created millions of unauthorized bank and credit card accounts, tracing as far back as 2011. The aftermath included the bank firing thousands of employees and agreeing to pay $185 million in fines from the Consumer Financial Protection Bureau, the largest fine in its history. The bank was also ordered to pay $5 million to refund affected customers. The unraveling didn’t end there. Over the next year, the bank was accused of multiple illegal and fraudulent practices, including: illegally repossessing servicemembers’ cars, modifying mortgages without customer authorization, charging customers for auto insurance they didn’t need, overcharging small businesses in credit card transactions, wrongly fining mortgage clients and selling dangerous investments. Has Wells Fargo transformed after the scandals
Tuesday’s testimony featured multiple questions about how Sloan plans to change the company and protect consumers from harmful practices in the future. Sloan cited restructuring, centralizing controls and creating healthier work environments for employees to help ease the aftershocks of past snafus. Last week, the New York Times , alleging that the culture at Wells Fargo hasn’t changed. Employees say the bank continues to place them under heavy pressure to hit unrealistic sales goals or pressure customers to spend more money. The report was referenced by numerous representatives during Tuesday’s hearing. When Rep. Patrick McHenry asked, “Is this the end of scandal at Wells?” Sloan had an indefinite answer. “I can’t promise you perfection,” Sloan replied. How Wells Fargo continues to grow their business
Even with all of the scandal and uncertainty of the bank’s future integrity, it’s almost counterintuitive to see customers continuing to give the bank business. Mark Schwanhausser, director of digital banking at Javelin, says customers straying from bank relationships is a complicated endeavor. “One thing that we know about consumers is that it takes a ton of TNT to blast Americans out of a banking relationship,” Schwanhausser says. “Most of the time that TNT is in the form of a bad customer service issue that finally is the catalyst to walk, or factors such as moving to a new town or a life event like marriage or divorce.” Schwanhausser compares Wells Fargo’s situation to the . Bank Transfer Day, the idea that Americans would send a message to Wall Street by switching from a big bank to a community bank or credit union, was a failure, Schwanhausser says. Wells Fargo’s lack of decline in business follows many of the same reasons why. “It didn’t happen. In short, consumers are quick to say, I’m mad as hell, and I’m not going to take it anymore,” Schwanhausser says. “They’re not so quick to act.” A pain to switch banks
Ben Gaddis, president of T3, one of the largest independent creative agencies in the United States, suggests cognitive dissonance is affecting customers of Wells Fargo. They know the company’s past acts are unethical, but they continue to bank with them anyways. Part of the reason why, Gaddis says, is because switching banks isn’t exactly easy and most alternatives aren’t so alluring. “There’s a pain to switch, and there’s no real ethical alternative,” Gaddis says. “You could go with a local bank, but are they going to have all the same services and capabilities?” Those who might want to switch banks could be overwhelmed by how difficult the process could be. , a wholesale financial services company, found that 60 percent of adults who have never switched banks think it would be at least somewhat difficult. Even if a consumer made the decision to move to a smaller bank, accessibility could be significantly altered. According to Wells Fargo’s 2018 financial review, the bank had 7,800 locations and more than 13,000 ATMs at the end of the year. Its strong geographic market presence makes it one of the most convenient financial institutions in the country. Easy to ignore bad activity
Gaddis adds that on a consumer-level, it could be difficult to connect with the broader picture of Wells Fargo’s fraudulent activity. “Some might think, ‘Yeah, they’re evil bankers, but my guy isn’t that bad. The local guy at my branch — we like him,’” Gaddis says. Marketing could also play a role in why consumers are still being lured toward the bank. Since 2018, advertising and promotion costs at Wells Fargo have increased by 44 percent, also according to the most recent financial review by the bank. Overall, however, Gaddis says it comes down to this: consumers are inundated with information, and their attention spans are getting smaller and smaller, making it easier for them to ignore the bank’s bad activity. “You can get really targeted with digital marketing,” Gaddis says. “If you do it right, and people have a short memory it’s still going to lead to increased (business).” Learn more
SHARE: Kelly Anne Smith Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Related Articles