The Wells Fargo scandal involved a variety of stakeholders who have stake in the issue; however, the main stakeholders include the consumers, the employees and their families, and stockholders of the organization. The affect these stakeholders suffer varies, but the ultimate affect the scandal has had is violation of trust by Wells Fargo and its leadership. When examining this situation, the main stakeholders who suffered the greatest harm from the scandal were the customers who fell victim to the fraud and had their privacy violated by an organization they trusted. In the course text, Trevino and Nelson spoke of the importance of trust and its importance in a service economy. Wells Fargo violation of the consumers’ trust has ultimately added
Wells Fargo founded in 1852 is known for being a financial services company. Wells Fargo provides banking, insurance, investment, mortgage, and consumer and commercial financial services through more than 8,600 locations, 13,000 ATM’s, online, and mobile devices. Wells Fargo is headquartered in San Francisco, California but has a vision of being decentralized from that location. Being decentralized allows each location to act as a headquarters to provide their customers with specific financial services. Wells Fargo employs approximately 268,000 employees to serve 70 million customers.
I am writing to you regarding recent Wells Fargo’s fraudulent accounts issue. Today, we see ethical failings repeatedly in corporate America despite the talk of the importance of ethics. While people have seen from previous scandals that the gains from unethical schemes are short-lived and result in much larger repercussions, recent corporate scandals prove that the lessons of previous scandals have not yet been learned.
Wells Fargo has a social responsibility to its customers to fulfill their economic, legal, ethical, and philanthropic needs. The scandal has presented numerous legal issues. It was negligent of the bank's executives and managers by placing impossible sales goals on lower level employees then encouraging, and pressuring them to meet these goals. The use of customer's information for fraudulent purposes was an invasion of customers privacy. Wells Fargo has violated the Federal Trade Commission Act which protects customers from unfair practices and has also violated the Sarbanes-Oxley Act (Thorne, 2011).
The Sarbanes-Oxley Act of 2002 was put in place to prevent corporations from committing accounting fraud or corruption. When a corporation manages somehow to get passed all the laws they do anything to keep the corruption going by covering up everything. With this going on the company’s main focus is keep the lies going and firing whoever is in the way. Wells Fargo has stated that they have fire over a hundred thousand people throughout the nation for being a part of the illegal activity in the company. Unfortunately for Wells Fargo employees are coming out from hiding telling their side of the story.
The first stated values, states that Wells Fargo’s value open, honest and two communication, which did open a hotline dealing after the scandal and handle the customer service. Though, I would not consider that company honest, but maybe openness after the fact. The second state values is based on accountable and proud of their conduct and decision dealing with Wells Fargo’s. Though, Wells Fargo is unethical in it business practices still used well known business practices and process to motivate salespeople open multiple accounts without the customer permission. Such as training employee in techniques into frauding customers and a system of rewarding for such behavior. Which shows a totally disregard for the customer financial well being
Bank of America is one of the largest banks in the nation. It is a multinational company and it is recognized by its high revenue value. Unfortunately, Bank of America has endured many complaints and harsh views regarding their lack of ethics. Ethical issues occur when there is a blatant disregard to implement integrity, trust, and responsibility. In some financial institutions, ethical matters are displayed in the way the consumers are treated. Within the past nine years, Bank of America has diminished all of their ethical promises by revealing customer information without their permission; discriminating against consumers based on their race; and manipulating overdraft fees in order to benefit the bank. In order to assess these problems, it is vital to recognize what Bank of America claims to stand for and determine where their most concerning issues are generated from.
According to the more than 5300 Wells Fargo’s former bank staff, direct cause of fraud is the bank directly linked employee compensation and sales performance. To face the difficulty of matching the sales aim, they had no other choices but to take a risk, and ultimately will inevitably damage to the interests of customers as the
Over the past five years Wells Fargo employees opened 2 million phony accounts for customers without their knowledge. The phony accounts helped employees reach sales goals while leaving customers with monthly charges from the false accounts. Since September when the fraud was discovered Wells Fargo has paid fines, stopped employee incentive initiatives and CEO John Stumpf forfeited his performance pay (Merle). The Consumer Financial Protection Bureau (CFPB) created after the financial crisis issued Wells Fargo the largest fine since its creation in 2011. (Talton). The CFPB hit Wells Fargo with a $185 million fine, the largest in their history and is being scrutinized for being an amount that is easily payable by Wells Fargo and will not be
In the year eighteen fifty-two, two men by the names of Henry Wells and William Fargo chose to establish a monetary administrations organization that we particularly know today to be Wells Fargo (Wells Fargo, 2017), which actually is quite significant. Before establishing the organization, Mr. Wells and Mr. Fargo chose to ground their organization in five standards which generally turned into their five very essential esteems. Their first standard being "individuals as an aggressive esteem" which implies an association with a colleague will literally prompt a definitely superior association with the clients, or so they particularly thought. Second "morals" Wells Fargo prides its self on being a straightforward organization and
Bank employees are alleged to have used existing customer names and accounts to open new checking accounts and transfer funds to them, create new credit cards, enroll in online banking, and order and activate debit cards without customer knowledge. Consequently, Wells Fargo employees were victims of contextual pressures. Furthermore, the employees act in unethical conducts causing the company in a loss of
The reason why Well Fargo Bank is an ethical quandary would be how they have gotten a fine for 185 Million dollars and have fired over 5,300 which were employee and manager.
The company has already lost many customer and accounts due to this scandal. Bad management was another component in this scandal and to regain the communities’ trust, they have to adopt different management practices. Although the company did get rid of their sales goals program, the company will still practice cross selling without fraud and theft. Wells Fargo is known for their history of successful cross selling to customers. They do not plan to change that, however they plan to do it without such impossible goals. As Stumpf said, he still believes in cross selling, and that it was ”shorthand for deepening relationships” (Reuters,