[Infowarrior] - Wells Fargo Opened a Couple Million Fake Accounts

[Richard Forno]

(the whole article is worth reading.  --rick)

Wells Fargo Opened a Couple Million Fake Accounts
Sep 9, 2016 6:30 AM EDT
By Matt Levine

Two basic principles of management, and regulation, and life, are:

	• You get what you measure.
	• The thing that you measure will get gamed.

Really that's just one principle: You get what you measure, but only exactly what you measure. There's no guarantee that you'll get the more general good thing that you thought you were approximately measuring. If you want hard workers and measure hours worked, you'll get a lot of workers surfing the internet until midnight. If you want low banking bonuses and measure bonus-to-base-salary ratios, you'll get high base salaries. Measurement is sort of an evil genie: It grants your wishes, but it takes them just a bit too literally. 

Anyway, yesterday Wells Fargo was fined $185 million by various regulators for opening customer accounts without the customers' permission, and that is bad, but there is also something almost heroic about it. There's a standard story in most bank scandals, in which small groups of highly paid traders gleefully and ungrammatically conspire to rip-off customers and make a lot of money for themselves and their bank. This isn't that. This looks more like a vast uprising of low-paid and ill-treated Wells Fargo employees against their bosses. The Consumer Financial Protection Bureau, which fined Wells Fargo $100 million, reports that about 5,300 employees have been fired for signing customers up for fake accounts since 2011. Five thousand three hundred employees! You'd have a tough time organizing 5,300 people into a conspiracy, which makes me think that this was less a conspiracy and more a spontaneous revolt. The Los Angeles City Attorney, which got $50 million (the Office of the Comptroller of the Currency got the other $35 million), explained the employees' grievances in a complaint last year:

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https://www.bloomberg.com/view/articles/2016-09-09/wells-fargo-opened-a-couple-million-fake-accounts

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It's better to burn out than fade away.