WASHINGTON The U.S. Consumer Financial
Protection Bureau on Monday released guidance on how companies
should use incentives to get higher productivity out of workers,
showing it is making good on its promise to scrutinize possibly
compromising practices after the Wells Fargo scandal.
The CFPB, a consumer watchdog, and other regulators in
September fined San Francisco-based Wells $185 million for
creating thousands of ghost accounts. Former and current bank
employees have said the bank's incentive program put
extraordinary pressure on them to open accounts, while Wells
Fargo executives have said rogue employees acting on their own
created more than 2 million phony accounts.
After the Wells settlement was announced, CFPB Director
Richard Cordray said he did not see a broader problem in the
U.S. banking industry with abusive sales practices, but pledged
to continue looking into the issues.
The bulletin released on Monday, which combined previous
guidance in a single document, said that "risks these incentives
may pose to consumers are significant and both the intended and
unintended effects of incentives can be complex." It added the
CFPB welcomed more dialogue and discussion about incentive
Alongside opening fake accounts, employees may deceptively
market products and put customers into products not in their
interests in order to meet sales benchmarks or to qualify for
bonuses, the CFPB said.
Since it opened its doors in 2011, the CFPB has settled 12
different cases where banks deceptively marketed add-on products
to credit cards or lied to keep customers in the products,
according to the bulletin.
It also has found a bank's telemarketing service provider
had enrolled customers into overdraft protection services
without their consent.