November 1996 we were notified of potentially illegal debt collection practice being used by our credit department with bankruptcy debt reaffirmations. Approved bankruptcy debts removed by the court, were put into collections per the policy in place. This policy directed us to negotiate a repayment plan with customers, with agreement not to reposes, on debts that were cleared by the courts. Reaffirmation documents needed to be filed with the bankruptcy court and obtain approval prior to us proceeding with this practice. Based on our internal investigation, we determined that Sear’s collection practices did not follow the correct filling process and were illegally trying to collect bad debts. Sears is working with the U.S. Department of Justice in all states affected and their Attorney General Offices to investigate this practice. The findings of …show more content…
Sears needs to take the first step to admit they took a wrong direction and are implementing a solution to work on restoring the good company name. Prepare a speech for the CEO to make publically, nationally on the wrongdoing and recourse that is now being taken. This needs to be done immediately.
- Work with proper authorities to right the wrongs. Admitting to authorities about the internal error found will help secure good faith. Try to take all steps suggested to work with proper authorities and minimize penalties. Legal counsel needs to investigate and secure assistance in all jurisdictions that have been affected by this situation. Progress needs to be tracked and communicated to leadership and audit teams weekly by legal counsel.
- Investigate source of illegal activity. Locate who had knowledge, if there is any documentation of the process and if anyone had knowledge that this practice was illegal. Investigate if those collecting affirmations were aware of the legal process to make them official. Terminate those that had knowledge of illegal policies and
Edmond’s was a suspect fraud investigator that worked for Discover credit card. He called to report his company flagged some purchases made on a Discover credit card with the cardholder being James Frank Boucher. Edmond was aware James Frank Boucher was issued a second Discover credit card due to previously reported fraud activity on the previous account. Discover contacted James Frank Boucher via telephone on 09/03/2016 at 1100 hours. Discover questioned James Frank Boucher about 3 transactions made on 09/02/2016. James Frank Boucher denied using his credit card for the 3 transactions. All 3 transactions were committed on 09/02/2016. 1) Circle K located at 111 E. Walnut St. Murphysboro, Illinois in the amount of $8.64 at 1241 hours. 2) Wal-Mart located at 6495 Country Club Rd. Murphysboro, Illinois in the amount of $73.40 at 0104 hours. 3) Walgreens located at 503 Walnut St. Murphysboro, Illinois in the amount of $1.94 at 0952 hours. The suspect attempted to make a cash advance at Circle K and Walgreens, but was declined. Edmond indicated the reason for the report to the local authorities was due to James Frank Boucher having a second report of fraud and believed it was necessary for the authorities to investigate. Discover reimbursed James Frank Boucher’s account after learning the 3 transactions listed above were fraudulent. I advised Edmond there was a report on file
Sears Holding Corporation is the fourth largest retailer in the United States and Canada. Their supplements include Sears, Roebuck and Co. as well as K-Mart. “The closing of the merger between Sears and K-Mart took place on March 24, 2005. Sears has more than 4,000 retail stores across the United States, Canada, Puerto Rico, and Guam. Sears offers products and services through over 2,700 branded and affiliated stores. Sears operates 894 broad-line stores and 1,354 specialty stores. Sears’ broad-line stores are mall-based locations. The specialty stores include Sears Hometown Stores that are mostly independently owned, Sears Home Appliance Showrooms, Sears Hardware Stores, Sears Auto Centers, and The Great Indoor Stores (Sears Holdings, 2011).”
r. Staff who are aware of unethical conduct or of unprofessional modes of practice shall report such inappropriate behavior to the appropriate authority.
...tential benefits and risks for each” (2006, pg. 73). Next, you will then examine and determine what the reasoning was behind what just occurred. “What happened when you acted? To what extent, if at all, did your action bring about the expected consequences? To what extent, if at all, were there unforeseen consequences? Knowing what you know now, would you have acted in the same way or chosen a different response to the situation” http://kspope.com/memory/ethics.php. Once this has been done you may want to consult with another colleague or an expert of some kind to run this information by to get some advice from. Then a decision can then be made on where to go from this point forward. Once the decision has been made there needs to be documentation that need to be filed. The last thing that needs to occur is the monitoring, evaluating, and then document the decision.
Formal corporate bankruptcy proceedings generally take on two distinct forms: Chapter 7 (liquidation) and Chapter 11 (reorganization). Under Chapter 7 liquidation, the firm is shut down by a court-appointed trustee, and the firm’s assets are liquidated and the proceeds distributed in accordance with the absolute priority rule. Chapter 7 is also referred to as a “cash auction” procedure. In Chapter 11, an organization remains in control of its business operations (known as a ‘going-concern’), but is subject to the oversight of the bankruptcy courts.
Also, around 5,300 employees were found to be involved in the scheme over a period of 5 years. In this case, if the defendant is liable, how should they be prosecuted for their fraud? Aggressive sales goals push employees to break the rules. “On average, 1 percent of employees have not done the right thing, and we terminated them.
As a result of the incident, feedback was taken from all parties to implement new strategies, policies, and practices on how to interact with public and private organizations to protect the company from possible
In 1992 Sears Auto center was charge with fraud by California consumer protection. They were accused of setting quota to their employee to sale a certain number of product or services during their 8-hour work shift. This caused an overcharge that was about $233.00 a car. Auto-repair shops chairman Edward A. Brennan, stated that the incentive compensation program and sales goals created an environment where mistakes occurred but Sear never admitted to any wrongdoing took place. Eventually there were penalties faced, 72 of Sears California auto department was put on three years probation.
Therefore, Sears Holding Corporation failed to reach the needs of current and future customers and the fads of society. Both organizations have struggled with offering outdated brands, merchandise, and store layouts. Further, there was little to no attempt to rebrand any part of their organization.
In an article published in Newsweek, "The Sorry Side of Sears", McCormick tells about a recent case involving Sears. Sears was using a credit card and issuing it out to anyone that would use it.
The Strategic Analysis will show some of the steps that have been taken to overcome some of the difficulties that Sears has had. The newest CEO, Arthur C. Martinez, has been a motivating leader for the company. He has implemented many changes that have increased sales and moved Sears back up to the top of the retail chain. These changes would include store remodeling, Internet strategies, differentiation, and human resource management.
lie and pin the blame on someone else. I think this is a very corrupt
The Hollate Manufacturing case provided by Anti-Fraud Collaboration has well illustrated how several common issues in an organization contributed to the fraud’s occurrence. These issues can be categorized into two major groups: ethical culture (internal aspect) and internal control system (external aspect). By taking effective actions to enhance these two aspects, an organization can protect itself against the largest frauds, which result in financial and reputational damage.
The issue arises from the limited senior management involvement and challenge in AML and ABC compliance activities. This involvement is essential, as senior management should set the “tone” for the success of overall compliance efforts and AML programs. Senior management need to take the lead on AML issues, for instance through communication with all levels and participation on everyday decision making processes. It is also important that the responsibilities of senior management are cleared defined and that there is a clear organisational structure to deal with and discuss bribery, corruption and
NET failed to recognize or react to either situation. It is imperative to understand that NET was liable for its employees but the employees, as individuals were also liable for their actions. NET lacked the system controls necessary to keep the company liability to a minimum on this issue. Usually with failures such as these, the system internal controls are this company is lacking the most. Ethical behavior among management is key to ethical behavior among employees.