on September 8, 2016 Wells Fargo’s unethical behavior was reveal when the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency fined Wells Fargo $185 million because over 2 million credit card and bank accounts were fraudulently open or applied for in customer names without their knowledge (Blake, 2016). As a consumer I want to be able to trust that I can walk inside a well-known bank and not have to worry about the bank employees taking advantage of me. Over the years we keep on hearing about all these financial scams and almost all of the time it is the consumers who are affected and when the scam is brought to light, it is the lawyers who see a big payday. I choose this particular issue because I am tired of the little man, meaning us the consumers being affected the most by these scams. I would think that the millions of dollars in bonus money that these senior level executive make each year would be enough but no they are greedy sociopaths that takes advantage of people who have less than they do in order to become rich and …show more content…
Key stakeholders are owners, directors, employees, and the community that the organization draws it resources businessdictionary.com,2016). Out of the 1000 Wells Fargo customers that were surveyed 3% stated that they were personally affected by the scandal and 14% of them stated that they have changed banks while 30% of them were currently looking to switch. Studies predict that Wells Fargo could lose about $99 billion in deposits and $4 billion in revenue because of customers rejecting to do business. Individual customers weren’t the only ones that were affect by the scandal but similarly 10,000 small businesses (Razin, 2016). I believe that the owners will be affected as well because of profit losses that will eventually affect Wells Fargo shares and the employees were affected after 5,300 of were fired (Razin,
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
Moncrief Company agreed to pay Jim Lester 20% of the gross profit made from the 2013 sales of the Zelenex. Between January 1, 2013 and December 28, 2013, Moncrief’s total available units for sale were, 50,000 units of Zelenex for $30.00 per unit ($1,500,000). Also in addition to the former activities, Moncrief sold 35,000 units for $60.00 per unit ($2,100,000). Moncrief Company uses periodic LIFO inventory method as a result, Jim Lester was to receive $210,000. (Textbook pg.469)
Jake Clawson Ethical Communication Assignment 2/13/2014. JPMorgan Chase, Bailouts, and Ethics “Too big to fail” is a theory that suggests some financial institutions are so large and so powerful that their failure would be disastrous to the local and global economy, and therefore must be assisted by the government when struggles arise. Supporters of this idea argue that there are some institutions that are so important that they should be the recipients of beneficial financial and economic policies from government. On the other hand, opponents express that one of the main problems that may arise is moral hazard, where a firm that receives gains from these advantageous policies will seek to profit by it, purposely taking positions that are high-risk, high-return, because they are able to leverage these risks based on their given policy. Critics see the theory as counter-productive, and that banks and financial institutions should be left to fail if their risk management is not effective.
It is proper to present a business definition of merger as it found on legal reference with the ultimate goal in the pursuing of an explanation on which this paper intents to present. A merger in accordance with the textbook is legally defined as a contractual and statuary process in which the (surviving corporation) acquires all the assets and liabilities of another corporation (the merged corporation). The definition go even farther to involve and clarify about what happen to shares by explaining the following; “the shareholders of the merged corporation either are paid for their share or receive the shares of the surviving corporation”. But in simple terms is my attempt to define as the product or birth of a corporation on which typically extends its operation by combining with another corporation. So from two on existence corporations in the process it gets absorbed into becomes one entity. The legal definition also implied more than meet the eye. The terms contractual and statuary, it implied a process on which contracts and statuary measures emerge as measures to regulate, standardized, governing or simply at times may complicate whole process. These terms provide an explicit umbrella and it becomes as part of the agreement formulating or promoting a case for contracts to be precedent, enforced or regulated in a now or in the future under a court of law under the Contract Business Law Statue of Practice. As for what happens to the shares of the involved corporations no more explanation is needed as the already actions mentioned clearly stated of the expectations of a merge’s share involvement.
First of all, they will not be able to buy tangible properties such as house, car and etc. because of that their credit ratings got a huge hit. Moreover, only 5,300 of the employees that were fired from the Bank, 10% were Managers. What could have motivated them to engage in this sham? This is not an attempt to imply all were of malicious but certainly most them led the way. The aggressive sales goals pushed employees to break the rules. “On average one percent 1 percent of employees have not done the right thing, and we terminated them. I don’t want them here if they don’t represent the culture of the company,” says John Stumpf, the company’s longtime chief executive, in an interview with The Washington Post. It is obvious that simple employees and managers could not break the law if someone from the top did not allow them to do so. But the executive board of Wells Fargo claimed that they only fired 1 percent of below employees and some managers for fraudulent accounts, however they also might be involved in that business crime although to build a case against a company executive, prosecutors would have to show “they knew there was a plan to create false accounts to drive up sales,” said Brandon L. Garret, a professor at the University of Virginia School of Law. Even if it appears that the executive purposefully attempted to avoid knowing about the fraud, prosecutors may be able to build a case. Because they don’t have to participate if there is willful
In May 2015, the LA city attorney’s office declared a lawsuit against Wells Fargo for pressuring its retail employees to commit fraud, opening accounts for nonexistent people and charging customers for products without authorization. In response, the bank hired the consulting firm PricewaterhouseCoopers for an in-depth analysis. After almost a year, PwC employees confirmed the fraudulent sales practices
As one can imagine the impact on Wells Fargo public image has been devastating. The trust that is essential for a company to have has been lost to some degree. Customers are feeling the impact as well. With unknown accounts added to a person’s credit, the long term impact will be felt. A customer’s credit will be negatively impacted by unknown accounts. Whenever they apply for a loan or another credit card they may be much needed credit.
According to Fortune Magazine, Wells Fargo’s fake accounts became one of the biggest corporate scandals of 2016. What happened? Wells Fargo employees made fake accounts without consent of the bank’s customers. The reason that the employees created these fake accounts was to meet sales quotas set by executives of the bank. The employees thought they could open and close these accounts before a customer would notice, but these workers thought wrong. This misconduct was thought to have started in 2011 until 2015. We discover later down the timeline that the timeframe claim wasn’t completely accurate.
The behavior of the leadership group at Wells Fargo during the time of the scandal was strictly goal-oriented. They were initially unaware of any issues regarding the unethical practices. The leadership team ignored the red flags and failed to react fast enough to the crisis regarding the opening of over two million phony accounts. This occurred due to the corporate culture at Wells Fargo focusing primarily on a high-pressure sales environment that ultimately pushed employees to create the fake accounts. The executive team members refused to acknowledge the root problems of the scandal, citing that the fraud was a small isolated incident.
In my opinion, the arguments of this case would be: 1) Did Bank of America act in an ethical manner?; 2) Were the customers harmed by Bank of America’s choice to rank debit card transactions largest to smallest rather than in chronological order? 3) Did the customers act in an ethical manner by knowingly overdrawing their account? While the financial institution may be in the wrong, the missing detail is that the customers in the suit would have experienced at least a single overdraft fee at the least. Why is it acceptable for the customer to knowingly overdraw their account or spend money that they do not have and have the bank cover the transactions in the short-term?
According to a Forbes survey of around 1,000 Wells Fargo customers, 3% were directly affected by the scandal, 14% are still deciding on switching banks while 30% are already on the search. If such happens on the broader scale of Wells Fargo and its customers, the company will be hit hard because of the scandal. Forbes claims that if this holds true for the rest of the company; Wells Fargo could suffer from a loss of almost $100 billion in deposits and $4 billion in revenue for the next year and a half. All because of aggressive goals for a company and people wanting praise for the success of their branch. To make matters worse, around 10,000 small businesses could’ve be harmed by the scandal as well.
In BBB Bank, a major issue in regards to ethics are the sales tactics of the sales staff. As their objectives were set with rewards based on sales value and volumes, their main focus was selling as many products with the highest value possible. This means that they lost sight of the customer and what it best for them. As a result, other internal departments have been impacted and it had a negative impact on BBB Bank’s reputation.
In this paper I will identify and analyze the Wells Fargo scandal as it pertains to the breakdown of leadership and ethics. I will first identify and analyze the event and discuss the challenges and conflicts the scandal presented. Then I will evaluate the issue by explaining why the issue has interest and concern to stakeholders followed by discussing the challenges presented to individuals and/or organizations around this case. Lastly, I will recommend action steps that should be taken to those involved as well as discuss what I have learned from exploring this topic.
Wells Fargo was recently fined for employees opening accounts without the customer's knowledge. It was a classic reputation management crisis, deserving of a solid reputation management
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.