Wells Fargo's Cross-Selling Mania Goes Back More Than 15 Years

Wells Fargo aggressively sought to drive up its "cross-selling" numbers for at least a decade prior to the period for which it was recently fined $185 million for fraudulent sales practices, according to a new Public Citizen report (PDF).

Public Citizen's report (PDF), "The 'King of Cross-Sell' and the Race to Eight," documents that Wells Fargo increased its reported number of products per customer in every year from 1998 to 2009 and that its streak was snapped only after it incorporated data from newly acquired Wachovia Bank, according to its annual reports.

Wells Fargo's reported number of products-per-customer rose more markedly from 1998 to 2009 than in the 2011 to 2016 period, during which the U.S. Consumer Financial Protection Bureau alleges that the bank opened more than 2 million accounts that may not have been fully authorized by its customers.

"Wells Fargo's never-ending quest for higher cross-sell numbers and its pressure-cooker atmosphere produced fertile ground for fraudulent activities," said Michael Tanglis, senior researcher for Public Citizen's Congress Watch division and author of the report. "While much of the focus has been on 2011 to present, Wells' own cross-sell data indicates that from 1998 through 2009 it hit record numbers each year. This demands further scrutiny. The public deserves to know: How long has this been going on?"

The increases occurred as a result of a concerted effort. As early as 1999, Wells Fargo was tracking the number of products sold per day by each banker and wrote in its annual report that it was "going for gr-eight product packages," a word-play that incorporated Wells Fargo's goal of achieving eight products per customer.

As early as 2000, Wells Fargo was already selling more products per customer than today's industry average, yet still expressed dissatisfaction, saying: "We're headed in the right direction but not fast enough."

In 2010, the bank said that it had been pursuing cross-selling strategies for a quarter century and had been dubbed "the king of cross-sell."

Anecdotal reports suggest that the bank may have engaged in fraud well before the time period for which it has agreed to fines. One former Wells Fargo branch manager told CNN that she was instructed in 2007 to require the employees reporting to her to open unauthorized accounts.

In Public Citizen's view, these details underscore the need for an investigation into Wells Fargo's actions prior to 2011.

Read the report.