Wells Fargo Unethical Practices Wells Fargo was accused of fraudulent sales practices back in 2016. The Wells Fargo Fake account scandal emerged and was seen all over the news. The $1.9 trillion balance sheet company (Heard on the street, 2016) image and name was harmed along with the customer base. The fake accounts scandal brought many to question the company’s unethical behavior and the company’s leadership. The company was accused of fraudulent sales practices, violating privacy of their customer and breach of contract. Nevertheless, Wells Fargo employees opened millions of accounts for customers over a period of 5 years (Kelly, 2006). Consequently, opening over two million illegal accounts. Such accounts were opened without the customer …show more content…
The wall street Journal (Heard on the Street, 2016) reported that consumers checking account openings were down 25% from a year from September 2016, and application for credit cards were down 20%. The scandal, moreover, has caused the bank’s stock fall about 9% since the $185 million settlement was announced as of October 2016 (Andriotis and Glazer, 2016) In the Aftermath, The CEO of Wells Fargo from 2007 John Stumpf, “retired” as a result from the scandal over the fradulent sales practices. Wells Fargo chief operating office will, Tim Sloan who has been with the bank for 29 years, will succeed Stumpf as CEO (sweet, 2016). After taking over the company Sloan has initiated a campaign “Moving forward to make thigs right.” The bank stated that will put customers interest and needs first by eliminating sales goals for retail banking. As I bank employee, I could see at first hand the pressure retail branches have to reach and retain goals. Nevertheless, violating the customer trust in such deceiving way is not worth reaching the goal. A company’s name, brand and consumer base is one of the most important keys to success. The consumer is trusting the company with their families’ life savings or retirement account at times. Conversely, retail bank employees are there to assist customer’s needs and guide them to make conscious and safe banking choices. To teach a better way of managing their
Employees were using the cross-selling which is a concept of attempting to sell multiple products to consumers. This concept led to fraudulent actions, in fact employees were encouraged to order credit cards for pre-approved customers without their consent, and to use their own contact information when filling out requests to prevent customers from discovering the fraud. " The Wells Fargo scandal was far different. Instead of a select few doing bad things, the unethical behavior was widespread at the bank, with thousands of employees engaged in secretly creating new bank and credit-card accounts for customers without their knowledge, resulting in overdraft and other fees." (Kouchaki, 2016). According to the Los Angeles City Attorney, employees were opening and funding accounts without customers' permission or knowledge in order to "satisfy sales goals and earn financial rewards under the bank's incentive-compensation program." This means that the board members of the bank were aware of that it wasn't by the employees' own wills. In fact, they were pressured by aggressive goals and performance which led them to immoral behaviors. Facing this problem, Wells Fargo bank had to take some measures to avoid bankruptcy, losing customers, or loosing brand
Moncrief Company agreed to pay Jim Lester 20% of the gross profit made from the 2013 sales of the Zelenex. Between January 1, 2013 and December 28, 2013, Moncrief’s total available units for sale were, 50,000 units of Zelenex for $30.00 per unit ($1,500,000). Also in addition to the former activities, Moncrief sold 35,000 units for $60.00 per unit ($2,100,000). Moncrief Company uses periodic LIFO inventory method as a result, Jim Lester was to receive $210,000. (Textbook pg.469)
In Wells Fargo “Vision and Values Guide Our Actions” each section has an “our standard” (2017, March) portion to help employees understand the expectations Wells Fargo has for them in their employment pertaining to ethical standards and the laws they have to follow. As stated in the Vision and Values Guide Our Actions handbook from Wells Fargo, the company states, “In order to maintain our reputation as a trusted ethical company, we must do our part to ensure that our values come alive through our actions” (2017, March). In this guide, the company has laid out blatantly how to respond and act ethically as a Wells Fargo employee, but this did not stop the company from performing illegal acts and starting the credit card and bank
CFPB activities on credit cards arise concerning, first, the CFPB CEO made them “more difficult to use.” Once an individual becomes a client of CFPB the alternative access to “hard cash” becomes fairly possible. As banks are already expensive for the customers of CFPB due to their profit margins, the other “illegal loan sources” become even more unreachable (Murray, 2017). So, certain monopolizing tendencies can be traced.
Wells Fargo, the American banking giant based in San Francisco, was the subject of a scandal in 2016 based on company-wide ethical problems. Wells Fargo’s unethical behavior and complete breakdown of ethical practices caused many people to suffer both within and outside of the company. Consumers were not properly informed about the types and the number of products being purchased on their behalf and were unfairly used to boost the value of the company, while employees were pushed to their moral limits to meet unrealistic sales goals.
Wells Fargo account fraud scandal One of the most recent white-collar crimes involved Wells Fargo, a banking and financial services provider. In 2016, San Francisco-based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo is involved in paying $185 million in fines and refunding $5 million to affected customers.
For Chase bank the mission and vision should always be clear to their customers. "At JPMorgan Ch...
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
Legal responsibilities at Wells Fargo include a wide variety of issues. They can be from protecting customer’s rights to securing company policy. Customers trust Wells Fargo with private and privileged information. Therefore, the bank must main...
The Wells Fargo scandal started in 2016 when it came to light that starting back in 2011 employees created over 1.5 million fraudulent bank
During the past year Wells Fargo, a well-recognized bank of the United States, has been trying to clean its name and the mess it got itself into, when it was brought to the public that the bank was involved in generating fraudulent checking and savings accounts for its clients without their knowledge or their authorization. “The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent”
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
Initially the bank’s core banking system was product oriented, but the need of the hour was to develop a customer oriented system, because the challenge is to build customer loyalty, cross sell, and enhance repeat business.
Recently, three individuals were awarded $170 million for helping investigators gather a record $16.65 billion penalty against Bank of America. Based on their action of inflating the value of mortgage properties and selling defective loans to investors. By influencing the market falsely is unethical and wrong. That is also why their punishment was so harsh. Firms today warn their managers and employees that failing to report unethical behavior and violations by others, could get them fired.
Communication modern technological tools that have been enhanced by Information Technology are having an impact on changing the very structure and communication of banking. That is, clients are enabled to make their banking transactions whenever and wherever they want. Bank clients, by just logging on their online account, can transfer any amount of money from their account to any other account, check their last processed banking transactions and apply for loans and other banking services. According to Keyes ( 2000, p.591) 'electronic checks provide consumers with the benefits of convenience and safety while allowing billers to maintain their existing depository relationships with their banks'. Further, e-mails has enabled bank employees to notify their customers of any new enhanced bankin...