Essay about Unethical Behavior At Wells Fargo

1061 Words 5 Pages
Wells Fargo has recently been in the spotlight recently for unethical behavior of employees, as well as socially irresponsible behavior at the corporate level. It was recently disclosed that Wells Fargo employees opened up millions of fraudulent accounts, both for banking and credit cards, in the names of unsuspecting customers (Bryan, 2016a). These accounts were opened without explicit consent of the customers involved so that sales goals could be met. Sales goals were attached to incentives for employees, so motivation was provided to employees that had the means to commit these fraudulent actions. Soon after these revelations came to the public’s attention, it was also discovered that Wells Fargo was violating laws and regulations regarding repossessions and loan rates for active duty military personnel (Crowley, 2016). After these issues involving fraudulent account opening became public, Wells Fargo’s leadership decided to end product sales goals to reduce the risk of reoccurrence, stating that its retail bankers should always be acting in the best interest of the company’s customers (Bryan, 2016a). Many state governments have decided to suspend dealings with the bank, at least temporarily. However, CEO reports has not substantially impacted performance
The situation at Wells Fargo does raise concerns that there is an agency problem. Parnell (2014) describes an agency problem as occurring when the agents employed to act on behalf of the owners do not act in the best…

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