Is It Tuesday? Time For Another Banking Scandal...

Tyler Durden's picture

Authored by Simon Black via SovereignMan.com,

Another day, another major banking scandal.

It’s getting to the point where you can practically set your watch to these things.

The latest involves our old friend Wells Fargo.

The Wall Street Journal reported last night that Wells has been screwing its customers on foreign currency exchange rates.

According to the Journal, Wells Fargo conducted an internal review of its fee arrangements and found that they had massively overcharged 88% of the sampled customers.

For example, the bank might have signed a contract with a customer to charge 0.15% on foreign currency transactions, but instead charged as much as 4%… about 26x higher than agreed.

It’s absurd to begin with that a bank would charge even a small percentage-based commission on foreign currency transactions (much less 4%), especially given that most of the transactions were to exchange euros and US dollars.

Sure, commissions are common in many industries.

When you list your house for sale, for example, your real estate agent receives a commission when s/he finds a buyer and closes the deal.

Real estate commissions often range between 2% to 6%. But agents earn this money because houses are big, illiquid assets. And it often takes a lot of time and work to close a sale.

But Wells Fargo has been charging huge commissions on buying and selling MONEY.

The foreign exchange (FX) market trades around $5.3 trillion each day (compare that to about $200 billion for US equities). That makes the US dollar / Euro trade literally one of THE most popular financial transactions in the world.

Billions upon billions of dollars and euros are exchanged every single business day of the week, around the clock, through electronic trading platforms.

It’s not like some currency trader at Wells Fargo ever had to lift a finger trying to find a buyer for his customer’s euros.

Anyone who has ever traded FX knows that it takes a fraction of a second to buy/sell major currencies.

There’s zero work involved on Wells Fargo’s end. Yet they charge a steep commission as if they have to put in all sorts of time and effort to buy and sell currency. It’s ridiculous.

But even worse, the bank formally agreed with its customers to charge a set fee. And then they totally violated those promises simply because it suited their interests.

How utterly, completely pathetic.

Bear in mind, this is the same bank that was caught creating fake accounts and charging fees to unsuspecting consumers without their consent, also because it suited their interests…

… and that this is an industry that has a track record of constantly violating their customers’ trust.

These banks have been caught red-handed illegally colluding to fix interest rates and exchange rates.

They have manipulated asset prices and knowingly sold their customers toxic assets.

They have invested their customers’ hard-earned savings in astonishingly stupid, no-money down loans to borrowers who had no hope of repaying the debt.

They use every accounting trick in the book to misstate their true financial condition, including the utter farce of carrying Volcker Rule assets on their books at 100 cents on the dollar… or mysteriously reclassifying their bond portfolios in a way to hide losses.

They reward themselves the most magnificent bonuses when times are good.

And when the house of cards begins to fall, they go to the public with hat in hand, claiming that they’re too big and important to lose any money.

Despite taking the public’s bailout money, these banks treat their customers with such contempt and suspicion. They make you feel like you’re committing a crime when you request a cash withdrawal of your own money.

It’s truly remarkable that this industry has any credibility left.

The good news is that it won’t last.

Banks no longer have a monopoly on finance. Technology already makes it possible to conduct just about any transaction you need outside the banking system.

You can deposit and withdraw funds, borrow money, exchange currency, invest your savings, pay bills, transfer funds, make online payments, etc. with cryptocurrencies, Peer-to-Peer platforms, and various blockchains.

And these technologies are often better, faster, and cheaper than the traditional banking system.

History tells us that technology almost invariably puts entrenched industries out of business.

E-commerce is obliterating traditional retail. Digital media is destroying print media.

And it’s only a matter of time before cryptofinance displaces the banking system.

Whether or not you think Bitcoin is a bubble at $10,000, it’s still worth understanding the enormous potential (and opportunities) of what these technologies can provide.

Because the alternative of dealing with Wells Fargo isn’t that attractive.

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MonetaryApostate's picture

There is only one scandal, too damn much money printing.

https://plus.google.com/collection/QorNbB

JRobby's picture

Wells: "our customers are unconcious"

chubbar's picture

Why should they stop cheating people? There aren't any consequences because the regulators are paid off and they only get wrist slaps.

Lumberjack's picture

Until Billy The Kid comes along.

HillaryOdor's picture

Anybody still using Wells Fargo deserves it, or BoA, Citi, Morgan Chase etc..

You still have local credit unions.  Vote with your dollars.  Don't go running to daddy government when known crooks rip you off.  The government enabled them.  Did everyone forget 2008?  There shouldn't even be a Wells Fargo anymore.

You have a responsibility as a consumer.  By rewarding incompetence and, even worse, rewarding the government's rewarding of incompetence, you are abandoning your responsibility to look after yourself.  You are not governing the market and so you are inviting more and more state involvement and making everything a million times worse.  You are destroying capitalism.  Fuck you Wells Fargo customers.

RedBaron616's picture

Credit unions only care about borrowers. They don't give a crap about savers. Never have and never will. Most act like banks anyway. I get tired of the nonsense that "we" own the credit union. Yeah, sure we do, just like "we" own our government. And good luck finding a "compatible" ATM when traveling. I have a couple of accounts with credit unions but am no more loyal to them than any other bank.

On the other hand, BoA has treated me better than any credit union. Moved from Virginia to Florida and didn't even have to switch banks. I can pull my checking down to nothing without a fee. Awesome customer service.

Rex Andrus's picture

Mark my words. Sunday afternoon lynchings are coming back. And its damned good thing.

MonetaryApostate's picture

I cannot fooking wait, I hope we get watch live in HD!

RedBaron616's picture

Big words are easy to type here. NOTHING is going to happen. NOTHING. Yawn.

Rex Andrus's picture

We're so sorry and embarassed and yada yada yada. We'll try to be more careful next timehttps://www.youtube.com/watch?v=Oa25s5pqluI

SillySalesmanQuestion's picture

We’ll Fuckyou...no Vaseline required.

buzzsaw99's picture

anyone who does business with wells deserves the fucking

Being Free's picture

My thoughts too Buzz.  At this point I have zero sympathy for anyone doing business with WF.  People still banking with them are the problem and deserve to be screwed.

ReturnOfDaMac's picture

Ummm, those rat-bastards bought a bank I chose to bank with specifically because they were NOT Wells back in the early 2000's.  What can you do ...

JRobby's picture

Change to locally owned and operated.

You will be surprised by the services.

MonetaryApostate's picture

Anyone that works for Wells deserves it...  FIXED!

 

Get a rope!

RedBaron616's picture

But try to find one of their ATMs when traveling or even around town. Tiny banks are exactly that: Tiny. Sorry, I don't have the time to run all around town to find THEIR branch to use THEIR ATM.

And besides that, I have never had any bad customer service isssues with BoA and I have been with them for at least 10 years, including a couple of moves. When you deal with a small bank and move, you have to find a new bank in the new community. Ugh.

Seasmoke's picture

Wells Fargo found me. As a servicer and a debt collector 4 Times removed from original fraudulent mortgage. They fraudclosed on my townhouse THAT I WAS NEVER LATE ON A PAYMENT, with post dated and robo signed documents on behalf of Freddie Mac, who was never named ever in any courts papers. 

 

PS.  John Stumpf better hope I never get a terminal diagnosis before he does. 

JRobby's picture

How could they foreclose if you were not in default?

adolphz's picture

More doom. Zerohedge has been creating crash for long time. Only making markets going higher. Their analysts at Shepwave keep calling the moves. How in the world they knew the dow would gap up three times leading to today's rally. Is beyond me. No one else is doing that. Thanks zero hedge. 

SILVERGEDDON's picture

Hey, Shitwave Hitler - go fuck yourself raw until your sad deadbeat broke loser ex Goldman Sachs Shitwave fucking cheapskate fuckers start buying ad space on Zero Hedge - you know - like successful legitimate businesses do. Until then, fuck off. When you get there, fuck off some more. And, then, fuck right off the edge of the flat investment earth like planet you live on. Assholes. 

nsurf9's picture

Oh, I'm definately going to have to quote you on this one!

rf80412's picture

Because the answer to the same old things people do with money is to invent shiny new things for people to do with money.

paulp's picture

What is wrong with wells fargo, didn't they pay enough bribe money to to clinton global pedofile foundation?

All the rest of wall street tries its best to anally rape their customers and nobody does anything.  mf global?  The proprietary trading desks of the big investment banks have no losing days ever.  No biggie?

Wells fargo is the whipping boy.  I'm not a fan of wells, just wonder why all the stuff being done by the others is so ho hum?

Herdee's picture

Boclchain will put Warren Buffet's crooked buddies out of business. You won't need a middleman crook.

slightlyskeptical's picture

Blockchain requires a middleman in the form of those who own the computers processing the blockchain. These are independently owned and they are currently processing in return for bitcoin. When all the permissable bitcoins are mined then what will be the incentive to keep the processing going? A. What are very steep transaction fees Alex. 

Barney08's picture

Jump, jump now all you bankers, Jump mother-fuckers! Nobody will miss you when you hit the street. Jump!

spastic_colon's picture

"Real estate commissions often range between 2% to 6%. But agents earn this money because houses are big, illiquid assets. And it often takes a lot of time and work to close a sale."

still way too high.......not to mention the mortgage brokers non-disclosed overly usury commissions.

AlphaSeraph's picture

Money changers acting like dishonest thieveing rats? I am Jack's complete lack of surprise.

Doppelganger71's picture

Wells Fartgo........................

Jack's Raging Bile Duct's picture

They forgot to add having been proven to knowingly and willfully launder drug money for the Cartels and CIA. Have they pledge their deposits as collateral for their toxic MBS yet, like BoA did? I cannot believe anyone gives this corporation money.

yellowsub's picture

It's all perception, thieves in suits are more acceptable and thus able to continue to rob than thieves in hoodies and baggy pants...

 

JailBanksters's picture

I'll bet all these bankers meet at the Albert Pike Memorial and have to

draw from two hats, one for the Bank and one for the Scam. The Shortest Straw Wins, and occasionally all the straws in the Bank hat are the same size, so they all win.

 

RedBaron616's picture

"You can deposit and withdraw funds, borrow money, exchange currency, invest your savings, pay bills, transfer funds, make online payments, etc. with cryptocurrencies, Peer-to-Peer platforms, and various blockchains.

And these technologies are often better, faster, and cheaper than the traditional banking system."

This is pure wishful thinking. Better, faster, and cheaper? I note that simple wasn't mentioned. I'm sure there is a reason. if I somehow lose money in these outside-the-banking-system technologies, I am on my own if something goes wrong and my money goes poof.

I note specifically that the author doesn't state that he uses them exclusively or even at all. Easy to write an article full of indignation against banks but tough to avoid them altogether.