Ethical Issues In Wells Fargo

Due to its unethical actions by creating thousands of fake accounts, Wells Fargo was fined $185 million in penalties. “Federal and state investigators found that the bank boosted its sales figures by secretly opening the accounts — then funding them by transferring money from customers' authorized accounts without their knowledge or permission.” (McCoy, 2017) Moreover, an independent review of the organization was conducted in August, 2016, “which examined more than 165 million retail banking accounts opened from January 2009 through September 2016, found approximately 3.5 million potentially unauthorized accounts.” (McCoy, 2017) Wells Fargo has since fired 5000 plus employees for partaking in the unauthorized account creation activity. Additionally, …show more content…
The continued spotlight on the scandal has made it difficult for Wells Fargo to regain consumer trust and has caused the organization continued difficulties on trying to continue growth. “The biggest fallout of the scandal for Wells Fargo was a sharp reduction in retail banking activity at the bank over subsequent quarters. The bank’s loan portfolio and deposit base have grown at a noticeably slower rate than its peers over the last two quarters, as the reputational hit resulted in existing and potential customers switching away from Wells Fargo’s services.” (Legal Issues Making It Hard For Wells Fargo To Regain Customer, Investor Confidence, 2017) Negative hits to a company's reputation can significantly reduce the credibility of the organization, and for one in the financial industry, being a credible merchant is imperative when seeking to improve