Wells Fargo Scandal

During the last Christmas season, Target announced that their data security was breached. According to David Lazarus in Los Angeles Times, Target stated that roughly 110 million customers’ information was illegally taken from their database. The information included their credit/debit card info, phone numbers, and email addresses. Target is one of the most popular grocery stores in the U.S.; they have a substantial amount of consumers. Because of this incident, consumers' trusts for the store have been decreasing. Worrying about losing its customers, the company offered a free year of credit monitoring and identity-theft protection, so the customers will feel more secure. Not only Target, some other large retailers also faced the same issues. They want their customers to trust that the companies can protect private data. However, should we not worry? Data breaches have been going on for about a decade, but we have not seriously thought about the issue. In order to protect people’s privacy, the federal government should make new laws concerning companies’ handling of customer information.

Wells Fargo is one of the well-recognized banks in the United States with over 8,000 banks. Last year Wells Fargo paid millions of dollars in fines for opening around 1.5 million bank accounts and applied for around 560,000 credit cards without customers’ consent. Due to this unethical and illegal event, numerous stakeholders were affected. In the article, The Wal-Mart Effect and Business, Ethics, and Society by R. Edward Friedman, Friedman states that stakeholder is anyone who can be affected by the business or can affect the business (Friedman 38). A great deal stakeholders were affected by the Wells Fargo crisis including Board of Directors, stockholders, employees, and the customers. Each stakeholder has different interests,

Bank of America Corp employees have alleged that the bank deliberately denied eligible home owners

Wells Fargo fired 5300 employees. The employees took millions in fees by regularly opening new

The article,”To Disclose or Not to Disclose? Wells Fargo Woes Shine Light on a Knotty Problem

Bank of America thrives off of the premise that they are aiming to enhance the financial lives of their customers. Per the Code of Conduct, Bank of America believes in treating all of their customers equally; they claim to expand beyond expectations to deliver satisfactory customer service; they implement discipline to eliminate financial risks to customers; they pride themselves on acting responsibly; and they strive to help individuals to reach their full financial potential. This company enforces the belief that they honor their ethics fully. This includes making

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.

In 2016, federal regulators caught Wells Fargo creating millions of fake bank and credit card accounts; over 1.5 million bank accounts were created. Furthermore, federal regulators also said that 565,443 credit cards were created, and 1400 of those accounts had been charged over 400,000 dollars in fees. Wells Fargo employees broke many ethical and legal boundaries and engaged in counterproductive work behavior.

Until the intent or motive is recognized, a problem cannot be described or solved. This should be a major question to ask in the Wells Fargo case. Most workers, especially in sales and marketing jobs are known to be compensated and promoted based on their performances (number of products and services sold, number of set targets met). So it is possible that Wells Fargo compensation and promotion structure motivated these employees to engage in such fraudulent acts in order to boost their incentives and bonuses which was measured based on their performance. Because it is surprising that such huge number of employees would engage in such acts to cheat customers for a period of five years. Both former and current Wells Fargo employees told regulators that their motivation to open unauthorized accounts was because of the compensation policies and felt extreme pressure to do that to benefit from such policies (Corkery

The ethics of the bank requires that there is ethics of integrity. It is supposed to be created through a culture in the bank and it should be one of the banks priorities because this is a business and they gain the profits from the people they serve on daily basis. Even if the bank shall survive this wave of scandal is so difficult now to convince any client to join this Wells Fargo which shall cause them a lot of money. Also all the old customers may start withdrawing and looking for other banks which they feel are more secure when they are keeping the money for them. It is so hurting and distrustful for a banking instead of accruing money in the accounts of their customers what they wells was doing was that it was misusing their money and giving them extra fees.

Embezzlement is an act withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type of financial fraud. a lawyer might embezzle funds from the trust accounts of his or her clients; a financial advisor might embezzle the funds of investors; and a husband or a wife might embezzle funds from a bank account jointly held with the spouse.

In September of 2016, it was revealed that there was alleged misconduct at one of the largest and safest banking institutions in the United States. Wells Fargo Bank was ranked among the nation’s safest financial institutions according to an analysis done by Global Financial, (Inside Tucson Business, 2009). Alleging that between May 2011 and July 2015, there were more than 2 million bank accounts or credit cards opened for customers without their knowledge or permission (Blake, 2016). Clients started complaining the they were receiving debit/credit cards from the bank that they had not ordered. Wells Fargo employees also started complaining that about the unethical behaviors they witnessed or were asked to participate in to the Human Resource Departments, the bank’s internal ethics hotline, branch’s individual managers and supervisors. All which led to the discovery of the fraud scandal.

It’s not very uncommon to see headlines of money hunger CEO’s or even a small group of decision making conducting unethical behaviors in their best interests. Generally, those conducting the unethical behaviors have the opportunity to gain from their actions. In the Wells Fargo scandal, this is not the case. This scandal was not acted out at the top, but yet through the front line employees. This scandal was also unusual due to the amount of

The reason how Well Fargo Bank is an ethical quandary would be how they had also have to pay the expensive for the people account that were victims and the 185 million dollar including for the fines.

Hiding or divulging information: Goldman bet against their clients several times. They knew material information on certain investment; however, they never communicated that to their clients because they were making money off them.