Banks enjoy a surprising amount of leeway, despite how many of them did not do right by their clients during the financial debacle of several years ago.

When the issue of financial controls arises, it is more about protecting against careless, negligent or malicious actors. The scenarios presume that the banks themselves are innocent.

Why can’t credit reporting agencies ┬ádetect when clients such as Wells Fargo have an unusual pattern of transactions? That’s a rhetorical question, but I will answer it anyway. It’s because they have no incentive to stop a sale.

 

Why Banks Get Away with It

Where is the incentive for someone to blow the whistle? To date, Wells Fargo has fired over 5300 people have been fired for creating 2 million fake accounts. You don’t have to look far for an answer to that rhetorical question either.

“Email validation” is a programming concept that is as old as dirt. When you register with a particular website, and it recognizes that your email address is already in use, what happens? It prompts you to either log in, or request a new password, if you forgot your username or password.

The Wells Fargo perpetrators used noname@wellsfargo.com repeatedly. This is a built-in scam. Click To Tweet.

Banks make their new terms of service become effective immediately; if you disagree, you have to close your accounts. Why can’t the same be done for rogue employees? The executive whose organization scammed so many customers walked away with a retirement of over $125 million. How come there was not a “clawback” clause in their employment contract to prevent payouts, in the event of malfeasance?

This is not the first time that we have seen white collar criminals walk away with their compensation package untouched. You mean to tell me that there could not have been something done in these last 8 years?

 

Vote with your Money

Before I created my own consulting firm, I attended my share of executive meetings with CEOs of companies. I can assure you that no executive staff meeting is complete without a report of the sales numbers. The bottom line is always part of the discussion.

For the leaders of a company to claim that they have no input, no influence, is disingenuous. While they may not have direct input into the implementation, they certainly shape the framework.

Customers of this bank should not settle for just full restitution of their dollars. They should get their money back, and walk away from Wells Fargo altogether. Do you know whose money do they use for this restitution? It certainly is not coming from payroll deductions of the executives who oversaw that failure.

As lay consumers, we can think of basic controls that could disincentivize such widespread theft. Why aren’t experienced professionals able to establish such controls at the bank? There’s no desire for it, plain and simple. By keeping our money with institutions that have no regard or respect for their customers, we only strengthen them, while making ourselves weaker.