Wells Fargo Essay

This practice was so common that Wells Fargo employees had several methods for doing this. The first method is sand bagging. Sand Bagging involves failing to open accounts by customers at their requested date, instead accumulating accounts to open in the next sales period to inflate profits. Another practice was called Pinning which was creating pin numbers without customer’s authorization, and attaching them to credit cards. Then employees would impersonate customers on Wells Fargo’s computers and use these pin numbers to create online banking and bills for customers. Finally, a practice called bundling was done where Wells Fargo employees would mislead customers saying that certain banking products were only available in bundles which forced customers to add more products than they wanted.

Wells Fargo has one of the longest and storied histories of any of today’s companies. The company was established by Henry Wells and William G. Fargo, who also co-founded the American Express, and several other investors in 1852. The company was to provide express banking services in California, which caught their attention due to the economic boom of the gold rush. They offered many diverse services and continually merged or took over existing companies to become the leader in western transportation by the end of the 1860’s. They have continued to adapt and grow by demonstrating innovations like establishing the transcontinental Express line during the emergence of the railroads and identifying and branching out into other areas throughout the years.

According to the more than 5300 Wells Fargo’s former bank staff, direct cause of fraud is the bank directly linked employee compensation and sales performance. To face the difficulty of matching the sales aim, they had no other choices but to take a risk, and ultimately will inevitably damage to the interests of customers as the

Wells Fargo just gave little entrepreneurs about I billion motivations to grin. The San Francisco-based bank as of late settled an across the nation $1 billion advance program particularly focusing on African American entrepreneurs.

(2)Since 2011, Wells Fargo’s employees have been secretly creating millions of unauthorized bank and credit card accounts, and some Wells Fargo employees even created fake Personal Identification Numbers (PIN) as well as fake email addresses to give the illusion of a growing customer base. The fake accounts earned the bank unwarranted excess fees, which led to increased sales figures. Everyone who had a legit account with Wells Fargo and the people who owned stocks in Wells Fargo were affected. Richard Cordray, director of the Consumer Financial Protection Bureau said, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses" (Cordray, 2016). The unethical behavior led to the termination of about 5,300 employees, and eventually Wells Fargo had to pay over $185 million dollars in fines, plus an additional $5 million to each affected customer.

Ever since the Consumer Financial Protection agency was born under Dodd-Frank , Senator Elizabeth Warren has been a advocate for Financial reform. Warren has advocated breaking up larger banks, so American does not fall into the "to big to fail" trap again. America should not be in a position, that citizens have to bail them out of a finantual disaster that they created. Warren wants jail time for presidents and managers that abuse the system. No more slap on the wrist for these white collor crimes, is Warren's motto.

This practice was so common that Wells Fargo employees had several methods for doing this. The first method is sand bagging. Sand Bagging involves failing to open accounts by customers at their requested date, instead accumulating accounts to open in the next sales period to inflate profits. Another practice was called Pinning which was creating pin numbers without customer’s authorization, and attaching them to credit cards. Then employees would impersonate customers on Wells Fargo’s computers and use these pin numbers to create online banking and bills for customers. Finally, a practice called bundling was done where Wells Fargo employees would mislead customers saying that certain banking products were only available in bundles which forced customers to add more products than they wanted.

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

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.

Employee rewards were linked to how many accounts they could open. Employees could reach both the rewards and sales quota by moving money out of one account to another. Banks require a minimum amount of $1,500 in a debit account or else they charge a fee; by moving money into a separate account, the customer’s real account would be under the minimum thus leaving customers to pay that fee. (Wells Fargo, 2017 March 14) By having these accounts, workers would reach their quota and the company got more money; this lead Wells Fargo to hold the title of most profitable and highest bank (Avalos, 2016). Fake unpaid credit card accounts have totaled over $400,000 in overdue fees. The government has charged Wells Fargo to pay five million to refund all customers. Ranging from tellers to corporate, over 5,300 employees who were involved in the scam have been fired. (Blake,

Wells, Fargo & Co. came into America in the age of economic boom and westward expansion, and

Scandals in the business world are not an uncommon topic to appear in new headlines. Recently Wells Fargo has fired over 5,000 employees for creating over 2 million fake accounts. New bank and credit card accounts were created without prior knowledge from their customers. The accounts that were created resulted in those customers inquiring fees such as overdraft fees. These fake accounts have been created over a five-year timeframe.

The Wells Fargo scandal involved a variety of stakeholders who have stake in the issue; however, the main stakeholders include the consumers, the employees and their families, and stockholders of the organization. The affect these stakeholders suffer varies, but the ultimate affect the scandal has had is violation of trust by Wells Fargo and its leadership. When examining this situation, the main stakeholders who suffered the greatest harm from the scandal were the customers who fell victim to the fraud and had their privacy violated by an organization they trusted. In the course text, Trevino and Nelson spoke of the importance of trust and its importance in a service economy. Wells Fargo violation of the consumers’ trust has ultimately added

Wells Fargo is an American multinational diversified financial services company. The company operates throughout the world. It is one of the largest banks in the US in the state of assets. Moreover, Wells Fargo is the largest market capitalization bank in the US. It takes the second category in the field of deposits, delivery of home mortgage services, and delivery of credit cards. The company has its headquarters in Francisco, California. The company has coverage of more than twenty-four states in the US. In every state, it has established its headquarters that act as distribution and storage regions for the company's products and services. The company offers insurance, banking, mortgage, and consumer financing through the sale and distribution of its networks across the US. The advantages of Wells Fargo Company are widely distributed: they have helped it realize a stable market in the United States and around the globe.

Bank of America is a banking and financial service industry located in Charlotte, North Carolina. If you would like to access the internet address for Bank of America, then you can click on this link provided https://www.bankofamerica.com . Its primary SIC Code is 6021 – National Commercial Banks, and its primary NAICS Code is 522110 – Commercial Banking. The Bank of American provides many goods and services for its customers such as banking, credit cards, loans, and investments. Every day Bank of America is competing against many competitors but JPMorgan Chase and Wells Fargo are some of the largest. Bank of America’s stock exchange ticker symbol is NYSE: BAC. The external auditor is PricewaterhouseCoopers LLP in Charlotte, North Carolina.