Banks are trusted to care for our money. So what happens when that trust is violated? Wells Fargo found out.
For those unfamiliar with the scandal revealed earlier last week, at least 5,300 Wells Fargo employees were caught creating more than 2 million bank and credit card accounts that were not authorized by customers.
When these accounts were created, the employees were given compensation as an incentive to convince customers to open accounts with the company. Or in this case, open them without convincing the customers.
These customers were left in the dark for months – and possibly years, mysteriously receiving minor charges that many never even realized were there to begin with. Only customers who kept a close watch on their accounts noticed these fees associated with these "ghost" accounts.
The attempt to gain additional commission for opening these accounts backfired when the company began receiving complaints from said customers.
Being pressured to open accounts by any means necessary seems to have pushed the employees to their breaking point. Anxiously trying to reach company goals, employees were desperately looking for additional ways to bring in more commission. And Wells Fargo is going to pay for it.
On top of agreeing to pay a combined total of $185 million in fines, they have also agreed to pay all affected customers full restitution for fees associated with the “ghost” accounts. So far, they have refunded nearly $2.6 million to these customers and estimate that another $2.5 million is on its way.
Although these complaints have now been addressed, it brings to question how long the complaints were being hidden or ignored before they were taken seriously. Some of the fraudulent activity was traced to previous years, which suggests that these fees have most likely been ignored for quite a while.
The crooked employees made up a total of approximately two percent of the company’s total employment country-wide. While most of these employees were terminated immediately after discovering the scandal, it leaves us wondering how many more are out there who may not have been caught.
If any employees slipped through the cracks and were not reprimanded or terminated, how can we continue to trust that our money is in good hands?
The short answer — we can’t.
Wells Fargo has been known to aggressively push their employees to open multiple accounts at the same time. They use manipulative tactics and claim that it is in the customer’s best interest to open more than one account at a time.
While it may have been the employees creating the accounts, there is nothing to say the company and their workplace culture isn’t somewhat responsible.
This is not to say that the 5,300 employees are not to blame, but it's clear that Wells Fargo has created intimidating and unreasonable goals for their employees. A line has to be drawn between the aforementioned behavior and compensating employees for high performance.
This leaves us wondering if it was worth it for Wells Fargo to create such aggressive goals for employees. And while millions of dollars in fines may only be a small blip on a massive revenue of $90 billion, customers will likely never fully allow themselves to trust Wells Fargo again.
