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Efforts continuing to clean up fake account fiasco at Wells Fargo

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October 2016 photo at Wells Fargo's museum in San Diego by James Ulvog.

October 2016 photo at Wells Fargo’s museum in San Diego by James Ulvog.

There haven’t been a lot of high-profile articles about the Wells Fargo fake account fiasco recently. I’ve noticed a number of articles though, which suggest there is ongoing activity addressing the intentional, systemic failure. This disaster will not be cleared up soon.

  • How does Wells fix the indirect harm it caused?
  • New compensation plan removes cross-selling as a benchmark
  • Possible MD&A enforcement action?
  • Branches received 24 hour notice of internal inspections
  • Bank may eliminate 2016 bonuses for senior staff

12/27/16 – Wall Street Journal – Wells Fargo Is Trying to Fix Its Rogue Account Scandal, One Grueling Case at a Time – Making customers whole will be easy if the customer was only charged a few dollars a month for a while. Still simple to resolve if there were monthly charges and a bunch of overdraft fees because money was taken out of an account unknowingly which resulted in some bounced checks.

What do you do when the unpaid fees on a credit card flowed into negative information on a credit report which resulted in a customer being denied funding for a home loan somewhere else? That’s what happened to one interviewed customer.

Destroying someone’s credit is a tough thing to make right.

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Written by Jim Ulvog

February 13, 2017, 9:14 am at 9:14 am

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Look at music and newspapers as hint of what could happen in accounting. Then consider how ripe Hollywood is for the same disruption. In your accounting job what are you doing to get ready?

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Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

The music and newspaper industries have revenue trends that look vaguely comparable to the graph above. The IT revolution caused that severe disruption.

Hollywood is facing the same disruption.

Here is the question for accountants:

  • What are you going to do before that type of disrupting change overruns your firm and your career?

I’ll be quite upfront with my challenge: I can see the impact of massive change in other industries, but I am not quite able to see what disruption would look like in my world. I’m struggling with how to get ready. Maybe you are too.

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Written by Jim Ulvog

February 3, 2017, 8:47 am at 8:47 am

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Wild guess on the tally of people enslaved by Alexander the Great

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Statue of Alexander the Great at Thessaloniki, Greece. Image courtesy of Adobe Stock.

Statue of Alexander the Great at Thessaloniki, Greece. Image courtesy of Adobe Stock.

One more followup on the human devastation caused by Alexander the Great.

There are a lot of posts on my blog discussing Professor Frank Holt’s delightful book, The Treasures of Alexander the Great: How One Man’s Wealth Shaped the World.

In Appendix 2, the professor tallies the reported plunder, tribute, and other resources seized by Alexander the Great. Quantifying the destruction is not possible because the ancient literature often does not quantify amounts, only that slaves, or plunder, or cattle, or tapestries, or something else was seized.

The professor does quantify the reported information in an algebraic format. I’ve previously mentioned:

Total proceeds from the wars is then estimated in a formula expressed as 81.67( X) +311,761.

The author guesses the grand total for his years of campaigning at something between 300,000 and 400,000 talents. With the fixed portion of the second estimate at 311k, I think the total would be well over 300k.

Those amounts are in talents, with each talent being a massive amount of wealth. For an order of magnitude, consider that my guess is an ancient Athenian talent would be expressed something somewhere in the range of around $28M today.

I just went through the Appendix looking at the tally of slaves taken.

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Written by Jim Ulvog

February 2, 2017, 8:37 am at 8:37 am

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Fun reading for accountants

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Manual accounting records. Anyone miss those? Didn't think sol. Image courtesy of Adobe Stock.

Manual accounting records. Anyone miss those? Didn’t think so. Image courtesy of Adobe Stock.

A few fun reads for accountants:

  • Why no Hollywood movie will ever show a profit.
  • Adrienne Gonzalez is back at Going Concern, talking about the idea of TBTF Big 4 firms possibly, maybe, becoming SIFI (not likely to ever happen, but a fun read anyway).
  • Talent shortage appearing in the CPA world.
  • Research from Management of an Accounting Practice now available.

9/14/11 (yes, 2011) – The Atlantic – How Hollywood Accounting Can Make a $450 Million Movie “Unprofitable” – If you have never taken a look at the astoundingly creative accounting in Hollywood, this article will give you a superb introduction.

Several years ago I took a fraud education CPE course in which the instructor went on a tangent to explain why no Hollywood movie has ever made a profit and none of them ever will.

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Written by Jim Ulvog

January 23, 2017, 8:31 am at 8:31 am

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In case you hadn’t hear, those telephone calls claiming to be from the IRS demanding you immediately pay back taxes are a scam.

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Wouldn't it be nice if the phone id actually was that accurate for every call? Image courtesy of Adobe Stock.

Wouldn’t it be nice if the caller ID was actually that accurate for every call? Image courtesy of Adobe Stock.

(Cross-posted from my other blog, Nonprofit Update, so you may refer your clients to an article that provides depth on how to avoid becoming victim of recent scams.)

The most frequent scam in 2016 was the phone calls saying “This is the IRS and if you don’t pay your past due taxes this instant we will send someone to your house to arrest you right now.”

There are many things wrong with those calls.

As a starter, your first contact with the IRS will never be by phone. You will instead get a letter explaining what the IRS thinks you messed up.

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Written by Jim Ulvog

January 9, 2017, 10:38 am at 10:38 am

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Postage rates changing 1/22/17

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Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

Postal rates will change again effective January 22, 2017.

Chronicle of Philanthropy reports New Postal Rates Will Boost Costs for Charities. Article says increase for charities will range from 2.8% up to 4.3%.

A significant change is that mail which was previously marked as “standard” will now be categorized and marked as “marketing mail.” That is a concern for an industry representative who said that may reduce the likelihood of recipients actually opening such items, which would obviously reduce the effectiveness of a mailing.

You can find the new rates at the USPS site: January 2017 Price Change.

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Written by Jim Ulvog

December 28, 2016, 7:53 am at 7:53 am

Posted in Other stuff

Minor updates on Wells Fargo fiasco

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Concord stage coach at Wells Fargo museum in San Diego. Photo by James Ulvog.

Concord stage coach at Wells Fargo museum in San Diego. Photo by James Ulvog.

Not a lot of news in the last few days about the Wells Fargo new account fiasco, but there are a few pieces of information.

12/12 – Reuters – Prudential stops distribution of policies sold through Wells Fargo – With the increased attention on the low-cost life insurance product from Prudential, called MyTerm, which was sold by Wells Fargo, the insurance company suspended sales of the product through the bank.

Article says that separately Wells Fargo suspended sales of renters insurance that goes through a different insurance company.

The California Insurance Commission has opened an investigation of the product sales.

Article says the California regulators says the New Jersey insurance regulator has also opened an investigation. Reporter cannot get confirmation from the New Jersey regulator.

12/16 – Francine McKenna at MarketWatch – Prudential allegations complicate Wells Fargo’s work with new partnersRead the rest of this entry »

Written by Jim Ulvog

December 16, 2016, 9:37 am at 9:37 am

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