Wells Fargo’s new CEO says the bank is tackling concerns about how the company handles ethics complaints filed by its workers.
Some employees, though, say it’s still not enough.
Speaking to employees Thursday during a town-hall meeting in Iowa, Tim Sloan said the bank has found “instances” in which employees may have faced retaliation after making complaints to its ethics line reporting system, according to prepared remarks the bank posted online. The San Francisco-based bank is “looking into any and all allegations of retaliation” and will take appropriate actions based on findings, the CEO said.
Sloan called retaliation “totally unacceptable” and said the bank has conducted an “end-to-end” review of its ethics line and made changes. He did not provide details.
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The lack of specificity is worrying some employees as the bank continues to reel from a sales scandal. One Wells Fargo employee who works in Charlotte said Sloan’s comments did little to put her at ease and that she would be reluctant to file an ethics complaint.
“It just sounds like more of the same lip service,” said the employee, who asked not to be named to protect her job.
“Until we see the changes being made ... until things actually happen, then I think the skepticism remains,” she said. “I would definitely think twice before I raise my hand.”
Sloan’s comments come as Wells Fargo tries to right itself following regulators’ claims that employees racing to meet sales goals opened more than two million accounts that may not have been authorized by customers.
Some former Wells Fargo employees have said they were fired or otherwise retaliated against after reporting such misconduct to the bank’s ethics line. In all, about 5,300 employees have been fired, including many low-level employees in branches. It’s not clear how much of a role retaliation may have played in the firings.
The U.S. Labor Department has said it is reviewing all Wells Fargo whistleblower cases going back to 2010. In a letter to Sloan earlier this month, three Democratic senators raised questions about whether Wells Fargo retaliated against whistleblowers by filing defamatory reports with a regulator.
Like some other companies, Wells Fargo relies on a third party to handle ethics complaints, a process in place before it agreed Sept. 8 to pay $185 million to authorities for its sales practices.
Wells Fargo says employees can submit complaints online or by calling an 800 number. The bank says the ethics line is a confidential channel and that employees may choose to remain anonymous where allowed by local law.
Another Wells Fargo employee, who works in a Texas branch, said Sloan’s comments Thursday didn’t give her much confidence.
“I don’t feel any more comfortable calling the ethics line,” said the banker, who didn’t want to be named to protect her employment. “Perhaps I will change my opinion once I hear or I see the new changes that they’re making to the ethics hotline.”
The employee said she was troubled that a branch manager whom she reported to the ethics line this summer seemed to know from which part of the branch the complaint came. The employee said she had reported the manager for using company resources for personal gain.
“He would make comments saying, ‘I know somebody’s calling the ethics line,’ ” the employee said.
“That’s why I don’t feel comfortable reporting anything,” she said. “If you submit a complaint or a violation of ethics, why should the person who’s being reported know where it’s coming from? That opens the door for retaliation.”
Wells Fargo spokeswoman Richele Messick said she is “confident” in the ethics line process, which is “completely confidential and can be anonymous if the team member so chooses.”
On Thursday, Sloan said the bank has made changes in consultation with an independent expert. The changes are being validated by Wells Fargo’s internal auditors, Sloan said, adding that employees “can have confidence in calling the ethics line and your call will be handled appropriately.”
Messick said the bank plans to provide employees with more details on the changes. She did not provide a timeframe.
“We are committed to being transparent with the team, and I think we will be sharing more with the team as we keep moving forward,” she said.
Sloan said the bank is using outside experts to help look into claims of retaliation. So far, the bank has found that the majority of ethics complaints were handled appropriately. If the bank finds any complaints were mishandled, it will “take action to make it right,” he said.
“I want to be clear: retaliation is unacceptable,” he said. “It’s against our policy, and it is totally unacceptable to me personally. It will not be tolerated at Wells Fargo.”
Also Thursday, Sloan said Wells last month launched its first “Ethics & Integrity Survey.” In that survey, employees “identified areas for improvement,” Sloan said.
Wells Fargo would do well to provide employees with as much information as it can about steps it is taking to prevent retaliation against employees who file complaints, said Kenny Colbert, president of Charlotte-based human resources-consulting firm The Employers Association.
“They need to be very transparent on everything … until they can gain the trust of the employees back again,” Colbert said. “They need to over-communicate.”
“This is going to be a several-year process,” he said. “This is not going to happen overnight.”
Buffett blames Stumpf for Wells scandal
Warren Buffett said former Wells Fargo CEO John Stumpf bears blame for an incentive system that encouraged staff to set up bogus accounts and then made matters worse by not fixing the problem.
Stumpf is a “very decent man” who “made a hell of a mistake,” the billionaire said in an interview posted on CNN’s website Friday. “And he didn’t correct it. That’s the thing.”
Buffett’s comments were his most extensive public remarks on the bank since it agreed in September to pay $185 million to settle allegations that employees set up credit-card and deposit accounts without customers’ permission. Staff have said they were encouraged by sales goals to open as many accounts as possible.
Stumpf stepped down in October and was replaced by Tim Sloan, a Wells veteran. Sloan visited Buffett, the bank’s biggest investor, after being named CEO and is well prepared for the job, the billionaire said.