Seven months after Wells Fargo’s fake account fiasco came to light and the bank ditched its high-pressure sales goal incentive program for retail banking employees, a new report reveals the company also revised its aggressive sales tactics for its credit-processing business following an internal probe.
Wells Fargo’s Merchant Services division helps businesses handle credit and debit card transactions. It also works with First Data Corp to lease or sell point-of-sale terminals to retailers.
According to the Wall Street Journal, Wells Fargo’s internal probe found that some Merchant Services staff had falsely reported customers’ sales and pushed small businesses into costly contracts in order to inflate their sales.
The Journal reports that some employees directed bankers to input false information into the bank’s systems about small-business customers’ sales. This, the internal probe found, was a result of the bank’s policy at the time that funneled smaller accounts — companies with less than $750,000 in annual sales — to a call center.
Additionally, the WSJ reports that some small-business customers also complained that they entered into contracts for payment terminals that included hefty fees they were unaware of.
In one case, a small-business owner tells the WSJ that he agreed to sign up with Wells Fargo’s service after the company waived a $400 fee and agreed to only charge a 1.5% transaction fee plus a small per-swipe charge.
Only later did he discover that the agreement didn’t include a payment to credit card companies and other charges. In all, these fees pushed the man to be charged 3% more than anticipated.
The WSJ reports that Wells Fargo has previously fired more than a dozen employees of the merchant processing division over the past two years because of these issues.
Additionally, last fall the bank restructured the Merchant Services unit to reduce incentives by preventing teams from competing against each other for small business sales and named a new executive to oversee small business for merchant services.