When a major corporation suffers a reputation crisis, reputation management is vital for minimizing the damage. Company executives must apologize, then explain what happened, without making excuses and blaming others. This seems obvious is anyone in the reputation management industry, however, it's not always obvious to executives who see shifting the blame as a way to insulate upper management from repercussions. It's the equivalent of a young child being scolded for fighting, and then claiming that it is not their fault because the other child started it. 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
In recent years, it seems as if there is a new financial fraud being reported any given day. One could even say that fraud has become almost a much a surety as taxes. Given the opportunities and pressures, many will businesses will fall victim to human natures and suffer losses through fraudulent activities. This case study will follow one such fraud, following the crimes of Terry Scott Welch in his pursuit for happiness by indulging his passion of landscaping.
Wells Fargo account fraud scandal One of the most recent white-collar crimes involved Wells Fargo, a banking and financial services provider. In 2016, San Francisco-based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo is involved in paying $185 million in fines and refunding $5 million to affected customers.
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
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
Wells Fargo is the third largest bank holding business in the United States. They were established in 1852, and have been widely trusted and generally scandal free since their company began doing business (Wells Fargo, 2016). That is, until July of 2016. In 2016 it was revealed that Wells Fargo’s employees were creating fraudulent accounts in peoples’ names without their permission or knowledge. The damages were severe, and the company has had to completely rebuild their reputation. While the company received a lot of social stigma through their fiasco, their finances were surprisingly unchanged. While the company is still dealing with the publicity of the scandal, they are handling it gracefully, and with the policies that they
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.
Our reputations are beliefs and opinions that are held by our friends, family and even complete strangers about bout us. Someone’s reputation determines how they will be seen before even meeting them, almost like a first impression. Which is why your reputation is something you need to handle with care and protect, however some will go to extremes in doing this for instance the play The Crucible, written by Arthur Miller. It is a look into what it was like back in the 1800’s during the Salem witch trails. During this play Miller makes the strong argument of the importance of reputation and the countless ways people will protect it. In the play this occurs with many of the characters some more than others yet it’s of importance to everyone in some way or another. The protection of one’s reputation also occurs outside of the play, an example of this would be in politics and sports. In the play The Crucible, Author Miller makes the argument that reputation is incredibly important and people will go to great lengths such as betrayal and lying to protect it, quite often ones morality will become altered when protecting their reputation.
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.
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.
Legal responsibilities at Wells Fargo include a wide variety of issues. They can be from protecting customer’s rights to securing company policy. Customers trust Wells Fargo with private and privileged information. Therefore, the bank must main...
"This is why the market keeps going down every day - investors don't know who to trust," said Brett Trueman, an accounting professor from the University of California-Berkeley's Haas School of Business. As these things come out, it just continues to build up"(CBS MarketWatch, Hancock). The memories of the Frauds at Enron and WorldCom still haunt many investors. There have been many accounting scandals in the United States history. The Enron and the WorldCom accounting fraud affected thousands of people and it caused many changes in the rules and regulation of the corporate world. There are many similarities and differences between the two scandals and many rules and regulations have been created in order to prevent frauds like these. Enron Scandal occurred before WorldCom and despite the devastating affect of the Enron Scandal, new rules and regulations were not created in time to prevent the WorldCom Scandal. Accounting scandals like these has changed the corporate world in many ways and people are more cautious about investing because their faith had been shaken by the devastating effects of these scandals. People lost everything they had and all their life-savings. When looking at the accounting scandals in depth, it is unbelievable how much to the extent the accounting standards were broken.
Though explicit monetary expenses from litigation can be quite large, Karpoff, Lee, and Martin (2008) estimate the implicit reputational costs to be 7.5 times the explicit costs. They additionally calculate that reputational losses represent 88% of the total losses incurred by firms engaged in financial
Companies don’t have much control over reputational risk. They do not know when, where, why, or how it will strike. The best that they could do is plan for it in advance. Concentration on reputational risk is vital for CROs (Chief ...
Reputation can be easily hurt and destroyed easily by your decisions or actions. For example, when buying a car or getting a loan you need to make sure you have good credit. Credit is similar to reputation and it shows how good or bad you are with payments and other finances. If you receive bad credit you will most likely be declined for a loan or have to bear with an extremely high interest rate. “If your reputation is damaged, the economic consequences can be
As a crucially important element in the organizations’ value chain, public relations is confronting a difficult dilemma or under threat at present because a bad reputation was undesirably labeled as one of its nature (Venter & Louw, 2012).In this case, it is likely that current threats could grow and turn to be forthcoming challenges if those prevailing problems cannot be solved immediately and properly.