Wells Fargo Bank Case

The management at wells Fargo relied on compliance as a strategy for managing its ethics (YouTube, 2018). The management set standards that employees were expected to meet. For instance one employee reports that in the line of work she realized that she was unable to meet the set goal. She decided to call the banks ethics hotline to explain to the management that there was no ethical way of making such huge sales (Cowley, 2018). The management at Wells Fargo was using the low-level employees to open accounts without informing the customers (YouTube, 2018). Although the management says that these was not the company’s culture as reported by the employees. The same workers who were engaging in opening more accounts were working in the same roof

In California, eight Wells Fargo employees were convicted of committing fraud facing a maximum penalty of 30 years in federal prison, also each employee is charged with at least one count of aggravated identity theft, which carries another two years in prison (https://www.justice.gov/usao-cdca/pr/eight-people-charged-bank-fraud-scheme-allegedly-used-information-stolen-wells-fargo). In the wake of the scandal, over 5,300 employees were fired over the course of five years for their involvements in the creation of the fake accounts. Some of the initial whistleblowers of the scandal faced retaliation by being terminated for speaking out against the orders to open fake accounts. CNN Money correspondent Matt Egan spoke with Bill Bado, a former employee of Wells Fargo, who has not been able to security another banking securities job since his termination for calling the Ethics Hotline to report the fraudulent activities.

Scandals in the business world are not an uncommon topic to appear in new headlines. Recently Wells Fargo has fired over 5,000 employees for creating over 2 million fake accounts. New bank and credit card accounts were created without prior knowledge from their customers. The accounts that were created resulted in those customers inquiring fees such as overdraft fees. These fake accounts have been created over a five-year timeframe.

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

On September 8 2016, the Consumer Financial Protection Bureau (CFBP) announced that it was taking an enforcement action against Wells Fargo Bank . Wells Fargo is a Fortune 100 company and one of the "Big Four Banks" of the United States. Investigations conducted by the Bureau revealed that employees of the bank created unauthorized deposit and credit card accounts across the country to meet sales goals. Over the years, the bank’s employees opened over 1.5 million fraudulent bank accounts and 0.5 million fake credit card accounts for customers, to meet sales targets and obtain bonuses. The affected consumers, were being harmed by the associated charges and fees for these accounts. The fees include insufficient funds or overdraft fees for the deposit accounts and annual fees for credit card accounts.

The Wells Fargo scandal originated back in 2011 when employees created over 1.5 million fraudulent bank and credit card accounts for their customers and charging the customers fees for these accounts that they didn’t know they had. The employees were given sales quotas that were clearly unrealistic and pressured to use unethical policies for obtaining them.

Wells Fargo, the world’s most valuable retail bank, has been fined to pay $185 million dollars after the exposure of schemes that defrauded customers in line with a business model, organized from the highest levels of the company, to boost its profits and growth (Beams). According to the US Consumer Financial Protection Bureau (CFPB), the bank opened 1.5 million store records and more than a large portion of a million accounts without clients ' authorization. Bankers moved assets from clients ' records into newly made accounts without their insight. The CFPB said that it resulted in customers being charged for insufficient funds or overdraft fees because the amounts that they were charged were not in their accounts. The bank also created more than 565,000 credit card accounts, of which 14,000 credit cards totaled more than $400,000 in fees and interest charges (Beams).

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

Another way is the bank should have had a way where they can check for accounts that haven’t been active in about twelve months; this would have prevented many cases where customers were not aware that these accounts were being opened. Wells Fargo should have invested on a system where it would check customer complaints of unusual account openings that they didn’t recall opening, and check with the customer for verification. Furthermore, another best way they could have prevented such scandal is if they terminated employees for fraud and ethical violations, for example, the management of the bank whom allowed and pressured their employees to sign up customers for accounts they didn’t authorize to meet their quota, these staff members should have been investigated and terminated. I think Wells Fargo learned to listen to employee and customer complaints and investigate more thoroughly. I also feel they now know to truly be a community based bank that’s really about its community. That scamming people just got them into a hole that they will really have a hard time getting out of, and not just because of money but because of people losing their trust in the company. Now its just about Wells Fargo’s road to

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.

fact, when U.S. senators requested the Labor department investigate the matter, they found lawsuits that went all the way back to 1999 for the same type of behavior (Egan, 2016). According to the Fair Labor Standards Act of 1938 the maltreatment behavior of the Wells Fargo managers against their employees was unlawful, this act was created to protect employees from being forced to work extra hours for little or no pay and instead guaranteed time-and-half rates for anything over a 40-hour workweek (Thomas, 2014). In response to these claims Wells Fargo issued a statement that insists they comply with the FSLA and that their employees are paid fairly. However, once again Grourley testified that during his time with the bank, managers would

As the scandal made national headlines, the Department of Justice opened an investigation which resulted in Wells Fargo former CEO John Stumpf testifying before the U.S. House of Financial Services Committee, where he avoided questions as to how the bank would help customers it harmed and whether it would recover income from executives. According to Rucker, Stumpf took full responsibility for “all unethical” practices for the Senate Financial Committee (2016). After testifying before the committee, Stumpf submitted his resignation after 37 years with the company due to his reputation being tarnished. Wells Fargo continues to suffer from the fake account scandal as several states and municipalities continue to end business relationship with

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The article explains the Well’s Fargo bank scandal in it’s entirety, highlighting and centering the article around the reasons as to why this scandal is more influential, and important than the numerous banking scandals of the past decade. It explains how the employees of the company would create accounts, totalling 2 million, that were fraudulent and created without express permission or knowledge of the customers. This leads to 5300 employees to be fired and questions raised over who is to blame for this incident. Although this information can be gained from any news source today, this article emphasizes the reasons as to why the scandal is so impactful in society today, and why it is gaining so much attention compared to other scandals that seem almost daily. The points that are highlighted are the fact that it is an easy to understand scandal, the question of who is to be blamed still looms unclear, it is perfect for the

Wells Fargo CEO will need to restructure customer service for the benefit of the customer, employees that in turn results in more profit for the shareholders. The company says they have improved recruiting and retention in the wake of the sales scandal. The bank has made big changes to how it compensates and evaluates employees in its branches. Wells Fargo has stopped paying branch workers based on how many products they sold and increased its minimum wage to a pay rate range of $13.50 and $17 per hour depending on the market they work in.