Wells Fargo Curbs Product Cross-Selling

Wells Fargo & Co. has instructed some of its employees to stop cross-selling products to customers, shortly after the bank was hit with a $185 million fine for questionable sales tactics.

The bank instructed workers fielding customer calls to "please suspend referrals of products or services unless requested by customers until further notice," according to an alert sent to some employees Friday that was reviewed by The Wall Street Journal.

A push to cross-sell multiple products to individual customers was at the center of claims last week by federal regulators and a city attorney of widespread allegedly illegal sales practices by employees. The bank didn't admit or deny wrongdoing in a settlement.

Wells Fargo, the largest U.S. bank by market value, continues to face fallout from those allegations, which included opening accounts for customers without their knowledge. Some Democratic members of the Senate Banking Committee on Monday called for hearings into the bank's sales practices, while at least one Wall Street analyst and some advocates of placing greater restrictions on big banks called for pay of top executives to be clawed back.

In a note to clients Monday, CLSA bank analyst Mike Mayo said the disclosure of as many as 2 million unauthorized account openings at the bank "probably should lead to a pay clawback" for Carrie Tolstedt, who oversaw all of retail-banking operations and related branches in recent years. Ms. Tolstedt announced earlier this year that she would retire from the bank after 27 years there and stepped down as community-bank head at the end of July. Ms. Tolstedt didn't immediately return requests for comment.

Dennis Kelleher, chief executive of Washington-based financial advocacy group Better Markets, said the Wells Fargo case seems "exactly designed" for clawback provisions under the bank's own guidelines. He said the bank should reclaim any pay attributable to fraudulent conduct. "If you don't do that, then you incentivize your employees to break the law," he said.

Wells Fargo declined to comment on calls for pay clawbacks.

The uproar around Wells Fargo's sales practices has threatened the reputation of the San Francisco-based bank, which has built a folksy image as a Main Street lender unencumbered by problems that have plagued other big U.S. banks. It has also led many customers to call the bank.

Indeed, Wells Fargo attributed the cross-selling freeze among customer-service operators to "high call volumes," according to the internal message. In the wake of opprobrium directed at the lender online, along with condemnations from even some competitors, the bank sent out talking points for employees who work directly with customers.

Among imagined questions, according to internal documents: "Do you get an incentive for selling me products or services?" Answer guideline: "Performance objectives are balanced among customer service, sales, ethics and risk and compliance. We only want to provide customers with products and services they want and value."

Another question: "My elderly parents bank with you and I'm afraid there might be open accounts they don't know about. Can you review their accounts with me?" The bank instructs employees to first find out if the person is authorized to discuss their parents' account details.

Speaking of the guidance, Wells Fargo spokeswoman Jennifer Langan said: "It's incredibly important to us that we are taking care of our customers today."