The Wells Fargo Sales Scandal
A $3 billion mistake that could lead to prison time.
Happy National Day of Encouragement! Today is the perfect day to remind yourself that “not interested” is just another way of saying “keep trying”. 😁
In today’s Follow Up:
The Wells Fargo Sales Scandal 🏧
Sales email tip ✍️
Sales across the internet 💻️
The sales tool of the day 🛠️
Sales jobs for closers 💰️
Sales Fact of The Day
Unrealistic Quota Leads to Fraud
If you’ve been in sales long enough, you’ve probably seen an unrealistic quota.
It usually starts with leadership promising crazy revenue projections and looking to the sales team to make them come true.
Just another day of sales putting the team on their back…
And when you don’t hit quota, you:
Get put on PIP
Commit fraud to inflate your numbers?
In 1998, Wells Fargo shifted their sales model to focus on cross-selling products to their existing customers, rather than customer acquisition.
This is common in corporations with large customer bases who want to increase their revenue per customer.
With this new shift, sales reps were given unrealistic quotas and pressured to sell more products to existing customers (even if they didn’t need them).
But reps still weren’t hitting their sales targets…
So in 2002, Wells Fargo began pressuring their sales reps to hit quota by any means necessary, aka - commit fraud.
Sales reps were told to open multiple unauthorized bank accounts for current customers, which led to higher fees and higher revenue for the company.
And if you think that sounds bad, it’s probably worse than you think…
In order to open these accounts, reps began forging customer signatures, creating PINs to activate the debit cards, moving money from millions of accounts, opening credit cards, and altering customer contact information to stop Wells Fargo employees from reaching out to them.
These methods became so widely used that employees started calling it “gaming”, and it became a part of normal work.
In Wells Fargo terms, if you ain’t “gaming”, you ain’t hitting quota…
Luckily for Wells Fargo customers, the SEC caught on to this scheme in 2016 and shut it down.
The bank was ordered to pay over $3 billion in fines, and senior leaders were investigated.
Earlier this year, it was reported that Carrie Tolstedt, the former senior executive vice president of community banking, is now facing prison time and a $17M penalty for her role in the scheme.
Talk about risking it all to hit quota…
Although Wells Fargo was the only bank “gaming” (that we know of), it took a toll on the entire banking industry.
When customers lose trust, it’s very hard to get it back.
If something seems too good to be true or doesn’t feel right, it probably isn’t. You’re responsible for your own actions.
If you’re a sales leader or manager and you know your sales reps are doing unethical things, you’re guilty by association.
When one player in an industry (like Wells Fargo) commits fraud, it can hurt all of the others by association.
Hitting quota is important, but it’s not worth serving time.
Have you ever had an unrealistic quota
Sales Meme of the Day
Reader Review of The Day ✍️
Want your review featured? Vote on the poll at the bottom and leave us a review!
And that’s a wrap!
What did you think of today's newsletter?
Want to advertise in The Follow Up? Click Here