Wells Fargo is the US multinational financial services company that is the fourth largest bank in America by total assets and the fourth-largest bank by market capitalization in the whole world. Wells Fargo quite successfully coped with the crisis of 2007-2008, and thanks to that gained the trust of people and attracted more customers. Hence, it was rather successful until the autumn of 2016, when people got to know about its illegal actions, and the bank became notorious.
The Wells Fargo bank account fraud scandal is the lengthy and serious litigation caused by an illegal bank action. These actions involved creating thousands of fraudulent savings and verifying Wells Fargo customers’ accounts without their knowledge and consent. At first, the bank managed to hide its fraud, but by the end of 2016, news of fraud became widely known. This happened due to the fact that Wells Fargo customers began to receive requests for strange payments, lines of credit, and unexpected debit or credit cards, and suspected something illegal. Then, in September, federal regulators found out that Wells Fargo employees were secretly creating millions of unauthorized “ATM cards, savings and checking accounts, credit cards, and mortgages” without their customers knowing it (Witman 131). About a year later, the bank also admitted they were wrongly fining their mortgage clients, overcharging small businesses for credit card transactions, and charging people for not needed auto insurance.
As a result of illegal activities, the company was fined $ 185 million, thousands of employees were fired. Then the bank was faced with additional criminal and civil lawsuits, the amount of which by the end of 2018 was estimated at 2.7 billion dollars (Tayan 2019). Initially, the bank’s management tried to blame the individual workers and managers of the Wells Fargo branch for everything. However, it later became clear that all illegal actions occurred under pressure from senior management, as they wanted as many accounts as possible to be opened.
This situation demonstrates that, when it comes to money, people are ready to deceive, lie, and steal. Even if it is a successful major company with a brilliant reputation, its clients always have to be careful and aware of what and why is happening to their money. Also, it is crucial to study all the details of an agreement when a person wants to let someone keep their money safe.
References
Tayan, B. (2019). The Wells Fargo cross-selling scandal. Stanford Closer Look Series. Web.
Witman, P. D. (2018). “What gets measured, gets managed.” The Wells Fargo account opening scandal. Journal of Information Systems Education, 29(3), 131-138.