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    Case Study - Fake Accounts

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    dhruva Kumar
    Wells Fargo was fined $185 million for opening up to 3.5 million fake bank and credit card accounts without customers' consent. The fake accounts were due to intense sales pressures from former CEO John Stumpf and senior executives who pushed employees to open 8 accounts per customer out of fear of losing their jobs. While some responsibility lies with the employees who created fake accounts, the ultimate responsibility belongs to Stumpf and high-level management who coerced the fraudulent behavior and profited from increased stock prices.

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    Case Study - Fake Accounts

    Uploaded by

    dhruva Kumar
    51 views1 page
    Wells Fargo was fined $185 million for opening up to 3.5 million fake bank and credit card accounts without customers' consent. The fake accounts were due to intense sales pressures from former CEO John Stumpf and senior executives who pushed employees to open 8 accounts per customer out of fear of losing their jobs. While some responsibility lies with the employees who created fake accounts, the ultimate responsibility belongs to Stumpf and high-level management who coerced the fraudulent behavior and profited from increased stock prices.

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    Wells Fargo was fined $185 million for opening up to 3.5 million fake bank and credit card accounts without customers' consent. The fake accounts were due to intense sales pressures from former CEO John Stumpf and senior executives who pushed employees to open 8 accounts per customer out of fear of losing their jobs. While some responsibility lies with the employees who created fake accounts, the ultimate responsibility belongs to Stumpf and high-level management who coerced the fraudulent behavior and profited from increased stock prices.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    51 views1 page

    Case Study - Fake Accounts

    Uploaded by

    dhruva Kumar
    Wells Fargo was fined $185 million for opening up to 3.5 million fake bank and credit card accounts without customers' consent. The fake accounts were due to intense sales pressures from former CEO John Stumpf and senior executives who pushed employees to open 8 accounts per customer out of fear of losing their jobs. While some responsibility lies with the employees who created fake accounts, the ultimate responsibility belongs to Stumpf and high-level management who coerced the fraudulent behavior and profited from increased stock prices.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    Wells Fargo & Company is an American multinational, publicly traded financial services company that is

    headquartered in San Francisco, California with main offices throughout the country. By this point in
    time many citizens have become familiar with the scandal that has occurred at Wells Fargo Bank;
    however, the astonishing part of this scandal is that the company has acted fraudulently and unethically.
    Recent reports as of late 2017 demonstrated that Wells Fargo now says that it has found a total of up to
    3.5 million potential fake bank accounts and credit card accounts which is 1.4 million more than
    originally estimated. Additionally, approximately 190,000 accounts received unnecessary fees which is
    60,000 more than originally estimated. The unethical behavior does not end here. It has been found that
    528,000 customers were enrolled in unauthorized online bill pay, and up to 570,000 borrowers were
    forced into unnecessary auto insurance; about 20,000 of these customers potentially had their cars
    repossessed due to these insurance costs. The primary motive behind the millions of fake accounts can
    be traced all the way up to the CEO and higher-level management. John Stumpf, former CEO of Wells
    during the time, and senior executives put tremendous sales pressure on the employees of Wells Fargo
    setting a target for the creation of eight accounts per customer. This tremendous sales pressure was
    forced upon lower-level employees at Wells Fargo resulting in the creation of millions of fake accounts
    which was done out of a fear that the average employee would lose his or her job if the demands of
    management were not met.

    There have been key governmental actions against Wells Fargo since the fake account scandal has taken
    place. First, the company has been fined $185 million. Secondly, there has been a growth cap placed on
    Wells. The bank has dealt with the currently faces investigations as well as class action lawsuits. These
    are steps in the right direction to mitigate the effects of Wells Fargo's actions; however, they are not
    enough. Individuals who hold the most responsibility including John Stumpf and senior management
    who oversaw the fraud must be appropriately indicted. While the employees as Wells who carried out
    the actions hold some level of responsibility, the ultimate responsibility must be targeted at Stumpf and
    high-level management, those individuals who essentially forced the employees and coached them to
    continually open fake accounts in the names of Wells Fargo customers. When the statistics pertaining to
    profit is analysed, the unethicality associated with this case becomes even more gruelling. John Stumpf
    and top-level management profited millions because of the surged stock price during the scandal of fake
    accounts.

    Do you think the current manager made the right decision?

    Assume the same situation happened with xyz company.


    If you are the manager of xyz, what would you have done differently?

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