Ethical Issues In Wells Fargo

According to an article published October 11, 2016, Wells Fargo Bank has had substantial ethical and fraudulent issues for several years (Cowley, 2016). There are reports of misuse in reporting and fraudulent activity dating back to the year 2005.
A Los Angeles city attorney filed a lawsuit against Wells Fargo in May 2015 (Cowley, 2016). This lawsuit was filed to bring light to the creation of unauthorized accounts by Wells Fargo Bank and the organization’s employees. Wells Fargo was accused of opening as many as two million customer accounts (Cowley, 2016). Some of these accounts were also credit card accounts. Wells Fargo has also been recognized with applying overdraft fees to these accounts. These fees cost consumers several thousands
The CEO has been touted as saying that Wells Fargo will remain in existence for years to come. The Chief Financial Officer John Shrewsberry has said Wells Fargo’s customers were still happy and its employees were productive (nypost.com, 2016).
Do they have an agency problem? Yes, Wells Fargo has an agency problem. The organization was accused and was proven guilty of fraudulent activities. The organization terminated 5,300 employees from 2011 to 2016. These employees were found to create over two million unauthorized bank and credit card accounts (Cowley, 2016).
Do they have an ethical problem? Yes, Wells Fargo has an ethical problem. The information given to the courts has exposed the organization’s pressure on employees to act in an unethical manner. These behaviors were reported numerous times without any repercussion. Some employees were terminated for whistle blowing and that is a huge ethical concern for any organization. Employees are tasked with being ethical and with reporting any unethical
Wells Fargo should stay away from offering monetary incentives to employees that meet goals. Wells Fargo should reset by circling back around to their mission and why they were created. Remaining focused on the customer and their needs should be the primary concern. Training all employees in ethical behavior should be at the top of the priority list. And lastly, have an outside and unbiased organization evaluate the organization from the top to the bottom.
Reference
Cowley, S. (2016). At Wells Fargo, Complaints About Fraudulent Accounts Since 2005. Retrieved October 12, 2016, from http://www.nytimes.com/2016/10/12/business/dealbook/at-wells-fargo-complaints-about-fraudulent-accounts-since-2005.html?_r=0
Parnell, J. A. (2014). Strategic management: Theory and practice (4th ed.). Los Angeles, CA: SAGE.
R. (2016). Wells Fargo faces long road to recovery after massive scandal. Retrieved October 12, 2016, from