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Indeed, Wells Fargo executives are candid about the demands they make, said longtime analyst Paul Miller of FBR Capital Markets. He said the pressure is regarded as "a badge of honor" at a bank that boasts of selling more add-on products to customers than any other financial institution.
"I've talked to them about it," said Miller, who recommends buying Wells shares. "They say, 'Of course there are going to be disgruntled employees. We're huge. What do you expect?'"
To another veteran observer, though, the kinds of abuses and sales pressures described in two lawsuits filed recently against Wells raise serious questions about whether the bank has enough controls to rein in a constant problem for financial firms — employees lured or pressured into harming customers for increased revenue.
On Wednesday, a former Wells customer sued the bank in U.S. District Court in San Francisco, seeking class action status in accusing it of fostering a high-pressure sales culture that ended up deceiving and defrauding him and customers nationwide.
Last week, Los Angeles City Atty.
Feuer's suit described how some bankers pilfered customers funds — not to pocket the money directly, but to fund additional customer accounts opened surreptitiously to meet sales quotas imposed by branch, district and regional managers.
"Unauthorized transactions, whatever the purpose, have always been a great concern at banks," said analyst Bert Ely. He questioned whether Wells Fargo was doing enough to electronically monitor transactions to make sure they are legitimate. "You sure as hell want to make sure there are controls that work."
Ely, a banking consultant in Alexandria, Va., said he also was surprised to hear of branch managers required to take conference calls four times a day to report to higher-ups on how each employee was doing in meeting quotas. That practice, too, had been described in Feuer's suit and in a Los Angeles Times investigation published in December 2013.
"Four times a day?" Ely said. "That sounds tremendously wasteful — costly because of the time lost on both ends of the call. You would think you would have electronic monitoring set up of accounts being opened, loans closed, that sort of thing. And then only make calls when the data shows production is down."
Wells Fargo has steadfastly denied that its sales policies are abusive, saying it trains its employees to put the customers' needs first and fires those that it discovers doing serious wrong.
The bank said it would defend itself vigorously, describing its culture as "focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members."
In his suit filed Wednesday, Shahriar Jabbari of Campbell, Calif., said bill collectors wound up badgering him for unpaid fees and penalties on seven bank accounts opened in his name without his knowledge.
The suit alleges unfair enrichment and violations of the federal Fair Credit Reporting Act and California unfair competition and consumer protection laws. It seeks restitution from the profits Wells made on "its unfair and unlawful practices." It also seeks triple damages.
"We have heard from Wells Fargo customers in multiple states who have been charged fees or faced collection actions for accounts they did not sign up for," said Matthew Preusch, a Santa Barbara lawyer representing Jabbari.
Wells Fargo declined generally to comment on the lawsuit. But it challenged one assertion in Jabbari's lawsuit that a Wells Fargo database called ClientTrack makes sensitive customer information from all parts of the bank, including its brokerage arm, accessible to all bank employees, enabling them to open new accounts for existing clients without the customers' authorization.
"We do not have a system that matches the description in the complaint," spokesman Ancel Martinez said. "And all our systems are designed to comply with applicable laws, including privacy laws."
National bank regulators have not made public any actions taken against Wells as a result of alleged bad sales practices.
However, in November, Comptroller of the Currency Thomas J. Curry said in a speech that his office has a "crucial role to play" in assuring banks "have appropriate internal controls, a strong risk management framework and compensation programs that incent employees to abide by the bank's rules and culture."
"As regulators, we are as concerned with the health of an organization's risk culture, which includes ethical standards, as we are with its underwriting standards," he said.
The lawsuits had little impact on Wells Fargo shares. They gained 44 cents on Thursday to $56.04.
The bank is so highly regarded by investors that it runs neck and neck with the huge Industrial and Commercial Bank of China for the highest stock market value of any bank in the world, said David Hilder, a bank analyst with broker-dealer Drexel Hamilton.
He said that since the financial crisis and resulting tougher regulations, all big U.S. banks have been concentrating on "cross-selling" more services to existing customers.
"I would be surprised if Wells Fargo has improperly pressured employees to sell inappropriate products or sell them in inappropriate ways," Hilder said. "It's not a good strategy for any bank."
FBR analyst Miller, though, thinks banks' ethics and practices don't matter to investors. "I think all these guys push employees and they wouldn't get results unless they did."
Analyst Jack Micenko, who follows Wells for Susquehanna Financial Group and has a "hold" rating on the bank, noted that giant banks like Wells have so many deposits that they are banned from increasing their market share through acquisitions. So they all are scrambling to do more business with existing customers.
"I don't think this lawsuit is a risk at all; banks are sued all the time," Micenko said. "After all the banks have gone through around the credit crisis, the perception of pressure cross-selling by employees to me isn't material to investors.
"Plus the free-market system suggests clients would leave if they were uncomfortable," he said, "and we have certainly not seen that with Wells."