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Wells fargo case on ethics
Ethical issues in the Wells Fargo case
Ethical issues in the Wells Fargo case
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More handpicked essays just for you.
Wells fargo case on ethics
Ethical issues in the Wells Fargo case
Ethical issues in the Wells Fargo case
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Ms. Tolstedt decided to retire in July, 2016 when the investigation was moving toward finality. Wells Fargo allowed Ms. Tolstedt to retire and take with her around $125 million in stock options while around 5300 of her former employees are getting fired for their part of the fraudulent activities. The author feels Wells Fargo did an injustice to society and Ms. Tolstedt’s former employees by allowing her to retire and take all of her stock options with her, since she should have been
Today, Wells Fargo is widely recognized for its commitment to the Hispanic and Latino community. This commitment however, is not a recent phenomenon and dates back to before the turn of the century. Since its founding in 1852, Wells Fargo had encouraged team members to treat all customers with courtesy and respect. The once informal policy became company standard in 1888 when agents and managers were required to show “proper respect to all. Let them be men, women, children, rich or poor, white or black…”
According to Fortune, “Executives sought to drive growth by putting undue pressure on its employees to hit sales quotas, and many employees responded by fraudulently opening customer accounts. In most cases these accounts were closed before customers noticed, but in other cases consumers were hit with associated fees or took hits to their credit ratings. The bank was forced to return $2.6 million in ill-gotten fees and pay $186 million in fines to the government. But the biggest hit Wells Fargo will take is to its reputation, as the media and government officials spent much of the year slamming the bank for its fraud,” (Mathews). The victims being the unknowing customers who saw their credit ratings plummet and faced steep financial fees, that were brought about through no fault of their own.
The Wells Fargo scandal included the creation of fake banking accounts, savings accounts, and credit cards. People who were employed at the bank opened these accounts in order to meet goals and make profit. When the fake accounts were discovered 5,300 employees were fired. However, the problem went beyond the fired employees.
Nevertheless, Wells Fargo has been fully accountable by taking immediate actions and measures to rectify the issue arose. First, the company was transparent in disclosing the unethical sales practice. Customers who were affected by the fraud are given reimbursement and fines of $185 million were paid to regulators. The company also closed more branches to focus on automated online banking. Based on the literature review, being held accountable is associated with answerability towards all stakeholders including the public.
BACKGROUND: The name Wells Fargo is forever linked with the image of a six-horse stagecoach thundering across the American West, loaded with gold. The full history, over more than 160 years, is rich in detail with great events in America’s history. From the Gold Rush to the early 20th Century, through prosperity, depression and war, Wells Fargo earned a reputation of trust due to its attention and loyalty to customers. Wells Fargo delivered business by the fastest means possible whether it was by stagecoach, steamship, railroad, pony rides or telegraph.
Wells Fargo Mockup Wells Fargo’s agreed to pay $110 million dollars to customers because unrealistic sales goals prompted personal bankers to open over 2 million fake accounts, this settlement is over and above, the $3.2 million in fees refunded when the scandal became public in September 2016. The practice allegedly started in early 2009, notorious and unrealistic sales goals were the primary cause of the “widespread fraud”, according to a top Federal Reserve official (Egan, 2017). According to Warren Buffet, who owns 10% of Wells Fargo stock, failing to address the problem, was the real “terrible mistake” (Cummings & Malter, 2016). Was there oversite? One might think, how does this happen, how could they miss such an obvious problem?
As all this came to fruition, the bank was penalized with $185 million dollars in fines and other penalties by county and federal organizations (Blake, 2016). On top of getting slapped with millions of dollars worth of fines, Wells Fargo fired 5,300 employees that may have been involved in the scandal (Blake, 2016). Some of Wells Fargo’s top executives where asked to step down in court proceedings as well as in other meetings with federal agencies. There have also been several lawsuits filed against Wells Fargo by customers and former employees of the company that feel that they were wronged and bombarded with threats. Thankfully, this scandal did not affect most of Wells Fargo’s clients.
Seydi Burak GAYRETLİ MGMT 512 – Corporate Governance EXAM 1 WELLS FARGO FAKE ACCOUNT SCANDAL In September 2016, we learned that Wells Fargo, one of the biggest banks in USA, has millions of accounts which is created by employees without authorization of customers. Employees have created those phony bank and credit cards accounts since 2011. By those accounts, Wells Fargo employees reached their targets and received bonuses. 5.300 employees are fired because of 2 million fake accounts.
Lastly, the SEC will scrutinize any securities fraud that may have been committed as a result of withholding private information (insider trading) to investors due to possible accounting malpractice. Currently, the SEC and Department of Justice results are still pending the ongoing investigation. Tomi Kilgore of MarketWatch reported “Wells Fargo investigation into sales practices should be completed before the April 2017 shareholder meeting.” Likewise, Wells Fargo responded following the mandates of the Office of the Comptroller of the Currency by opening
According to this article, “ Chase Bank has admitted to the presence of a technical bug on its online banking website and app that allowed accidental leakage of customer banking information to other customers.” This shows us that even perfect systems can be faulty. This can also connect back to consumers because not only were they the victim in this situation but they have to go out of their way and dedicate time and money back into fixing their financial situation because of the recklessness of Chase Bank. The impact this left on the consumers was a perfect example that they should not be totally reliable on technology. In this article it states, “BleepingComputer has asked Chase specific questions including how many customers were impacted by this issue and what was its cause.
Many individuals are asking: how could it have been prevented? Or how could it have been better handled? There is a small window of time needed to make executive decisions about how to handle a breach, especially one of this magnitude. Issues climb the corporate ladder to the leadership and decisions must be made about how to proceed considering the new information. The ethical dilemma that surrounds Equifax has more to do their corporate leadership than it does anything else.
When your organization is responsible for keeping track of the money and property of approximately 70 million individuals, you can be sure that customer service is going to be one of your most pressing concerns. Such is the case with Well’s Fargo, one of the “Big Four” banks in the United States. When your organization is responsible for keeping track of the money and property of approximately 70 million individuals, you can be sure that customer service is going to be one of your most pressing concerns. Such is the case with Well’s Fargo, one of the “Big Four” banks in the United States. When your organization is responsible for keeping track of the money and property of approximately 70 million individuals, you can be sure that customer service
When it comes to the Ethical Decision Model, it does not just pertain to the employees who opened these accounts but also leadership who either failed to realize what was going on or decided to sweep it under the rug by just covertly firing some employees. Wells Fargo did take the first step in recognizing the problem but failed to define it, which explains why these unethical behaviors continued for so many years. When the corporation was initially aware of what was going on, they should have acted immediately and strategized a solution that would dilute the possibility of it occurring again. Instead of defining the problem, which would have foster, a proper solution but company decided to just terminate
As employees faced pressure to reach quotas, they found ways to cheat the system. If a customer came in to open an account, the employee would simply make it two or three. The intense pressure placed on employees created an environment that not only rewarded dishonesty and malpractice, but made it necessary to maintain employment. Many employees attempted to report these illegal practices to the Wells Fargo ethics line, but action was never taken and the problem escalated.