Wells Fargo Crisis

After the financial crisis in 2008, the regulation has been paid more attention to. The financial sector’s reputation was trashed by the crisis. A light touch has been replaced by close oversight, even using ‘stress tests’ to measure banks’ ability to withstand crises (The Economist, 2017). One scandal followed another unfolded: providing mortgages to people who could not afford them; mis-selling securities built upon such loans (RICHARD, D., 2010); selling expensive and often useless payment-protection insurance; fixing Libor, a key interest rate (Weldon, J., 2013); rigging the foreign-exchange market (WATSON, J., 2015); and much more. Wells Fargo was the winner of the crisis because it focus on retail and small & micro business loan. Its
2006). In the past several years, Wells Fargo lowered employees’ regular pay and raised their sales target to ‘motivate’ employees to improve sales performance in different regions’ branches. In a long period, Wells Fargo using a ‘special incentive policy’ urging staff to reach the ‘unrealistic’ quotas, at the same time, turning a blind eye to the illegal means used by employees to complete the requirement (Appendix 1). Obviously, the customers were the victims firstly can be defined in this event. Wells Fargo’s employees have issued and activated debit cards without customers’ permission and forged email addresses to open unwitting online banking operations for customers. Many clients have to pay credit card annual fees, interest and other costs for credit cards are not authorized to open , but in their own name (Appendix 2). In the US banking industry, cheating and squeezing consumers are common. In June 2016, bank staff admitted in Congress that they sold unnecessary products to
The bank did not disclose how much was expelled after the investigation, but such a large number is clearly shown a management problem (Appendix 1). Wells Fargo’s rule is linked the sales performance directly to the salary of individual employees. If the task of the day not be done, employees need to stay overtime, continue to call until meet the marketing target, or prepare for the next day to catch up with the plan.Before the hearing, the highest level of employees expelled from the Wells Fargo only the branch sales manager, while the ultimate cause of fake account is the company’s culture, top-down cross selling strategy. A report about the retail banking sector published by the National Employment Law Project in June 2016 found that ‘workers suffer harassment and threats in order to make ever-changing over-aggressive quotas.’ The report pointed out how easy it could be to move from abusing corporate employees to abusing customers and clients. The real scandal at Wells Fargo may not just the false accounts, but also the years of wage-hour violations and gut-wrenching pressure on low-paid employees. In the absence of union representation and with unreliable enforcement by the understaffed Department of Labor, who is going to protect the workers who could then be in a better position to protect customers (America, 2016)?
The unethical behaviors of Wells Fargo can be described as: opening more than two million unauthorized