CHARLOTTE, NC (Deon Roberts/The Charlotte Observer) - Julie Miller was working in Pennsylvania for Wachovia when Wells Fargo took over the Charlotte bank in 2008 and began changing more than the name on its branches.
Miller said she watched with dismay as Wells Fargo increased her branch's sales goals and lowered bonuses for meeting the new targets. The changes took place around 2011, when her branch converted to the Wells Fargo name, she said.
"It became a living nightmare," said Miller, 52, who no longer works for Wells Fargo. "They almost doubled our goals and decreased our incentive pay. It drove me to drink."
Miller said her health began deteriorating as she tried to meet daily requirements that her branch sell 42 products, like mortgages and lines of credit, and open seven checking accounts.
That's when she also started noticing Wells Fargo customers complaining they were being signed up for products they never asked for.
"I'd have seniors come in with their kids and say, 'Why does my mom have five checking accounts?'" Miller recalled. "Because some banker needed the credit and opened up five checking accounts for them."
This week, Wells Fargo agreed to review how it sells products as part of a $185 million deal to settle government accusations of "widespread illegal" practices in its branches. The bank said it fired 5,300 people between January 2011 and March 2016 for secretly opening unauthorized deposit and credit card accounts.
Regulators charged that the San Francisco-based bank's employees opened more than 2 million deposit and credit card accounts that customers may not have authorized. In some cases, employees created phony email addresses to enroll consumers in online-banking services, regulators said.
Wells Fargo reached the deal without admitting or denying allegations.
The settlement has cast a spotlight on the industry's long-running practice of paying bonuses to staff who work in branches, such as personal bankers, for meeting sales goals.
For those employees, who typically make far less than high-ranking executives, bonus pay can be an important slice of their compensation. Bankers who fall short of quotas can be fired.
Critics say Wells Fargo's case highlights the pitfalls of such high-stakes arrangements.
"The incentives structure and the sales pressure create an inevitable conflict of interest that's going to lead to more illegality like this," said Dennis Kelleher, president of Better Markets, a Washington, D.C.-based nonprofit that advocates for financial sector reforms.
"Wells Fargo has been caught, but this is an industrywide cat and mouse game," he said.
For its part, Wells Fargo wouldn't comment Friday on Miller's account. But the bank said in a statement it still sets sales goals for bankers in branches, although it notes it has made adjustments to practices over the past three years. Those changes include reducing sales goals, the bank said, although it did not provide specifics.
In addition, the bank said it has been putting a greater priority on customer service, customer satisfaction and ethics. The bank says it has begun sending customers email alerts when accounts are opened in their name.
"Goals, including sales goals, are intended to encourage team members to act in the best interest of customers," the statement says. "We continually review our performance expectations at all levels of the organization, so that they encourage the best possible customer experience and do not pressure team members to sell products to customers they do not want or value."
Push to sell more
Putting more products in customers' hands can lift a bank's bottom line, in large part because of the fee and interest income those products can generate.
Banks are also on the hunt for ways to grow their earnings, as interest rates kept super-low by the Federal Reserve constrain their profitability.
"Given we have been in this low-rate environment for so long, revenue growth is particularly challenging, so banks are increasingly looking to do more business with their existing customers," said Joe Morford, an analyst at RBC Capital Markets.
Across the banking industry, Wells Fargo is known for touting its cross-selling, a term for getting customers to buy multiple products. It calls its branches "stores." If you visit one of those stores to open a checking account, for instance, a banker might also try to sell you a credit card.
During the second three months of this year, Wells Fargo said its customers held an average of 6.27 products per household. Some other banks, like Bank of America, don't break out such metrics.
In the past, Wells Fargo has used an "Eight is Great" catchphrase to describe how many products per household it would like to have. Wells Fargo CEO John Stumpf, talking to bank analysts in 2014, said he dreams about checking accounts.
"I'm going to bed earlier these days so I can even dream longer about them. I still just love checking," he said at the time. Customers who open checking accounts end up doing other things with the bank, he said.
Some, like RBC's Morford, expect Wells Fargo's settlement will cause the industry to examine its cross-selling practices, to make sure they are focusing on what's best for customers and less on quotas.
Brian Simmonds Marshall, policy counsel for Washington, D.C.-based Americans For Financial Reform, doesn't expect a major retreat from cross-selling in the industry because of the fees it generates.
"Not at all," he said. "It's a significant profit center for the banks."
Pressure for change
Some bankers have recently brought concerns about sales pressure to Congress. In June, bankers testified at a congressional briefing on sales goals they said force bankers to push unnecessary products on customers.
Miller, the former Wells Fargo banker in Pennsylvania, was among those who testified. In an Observer interview Friday, she said bankers are largely driven to make their sales goals to avoid being fired.
"People need to sell to keep their jobs, and if they don't sell and meet their goals then they get one warning ... two warnings ... three warnings: you're fired."
The bank told the Observer that failing to meet sales goals alone would not lead to termination.
A report issued in June by the National Employment Law Project also noted that "predatory incentive programs" at banks force employees to choose between the consumer's best interests and earning a living wage.
Wells Fargo says the primary driver of its branch workers' compensation is their salaries, with variable pay ranging from 3 to 15 percent of their total compensation.
As a consumer, you can take steps to make sure a banker hasn't put you in a product or service you don't want or need, experts say.
One of those is to monitor credit reports, which can show how many accounts you have opened and where. Others recommend asking questions when a bank is offering additional products or services.
Kelleher, of Better Markets, says ultimately consumers must be vigilant about monitoring their accounts.