CASE 10

Case 10

Wells Fargo;

September 2016, was a time when media started to reveal ”dark” secret of Wells Fargo; Apparently employees of the bank had created over 2 million fake accounts. Result of this, Wells Fargo fired 5300 employees because of the illegal activity they were practising for over the last two years. Wells Fargo also agreed to pay a historical high fine of 185 Million Dollars.

Employees of Wells Fargo claim that they have been pushed to do illegal actions, and mentioned that the managers checked in for 4 times a day, asking if they have reached their sales goal. This claim has even caused a lawsuit against Wells Fargo back in May 2015.

When opening bank accounts, the employees created wrong e-mail addresses, like 1234@wellsfargo.com, so that they could confirm the opening of a new bank account by themselces. Many of them have opened bank accounts even for their friends and family, either with or without their knowledge. (Egan 2016, 1-3)

Few days after this case became public, the head of Wells Fargo, Mr. Stumpf, resigned (BBC 2016, 1).

Because of these illegal activities done by their employees Wells Fargo has promised to change some things;

-       They will send a confirmation Email to the customer within one hour, when a new bank account opens on the same name.

-       They will contact every single deposit customer in the USA to see if they really wanted the bank account on their name or not.

-       They will contact thousands of credit card customers to ask the same thing. BBC 2016, 1-2

But who’s fault is it? It is always easy to pin point with a frowning finger to the CEO only for those issues, but is it really his fault? Of course, CEO of Wells Fargo, Mr. Stumpf should have known about those practices. The creation of 2 million bank account is not something a CEO does not hear about, and as it is known and stated, some people even called the ethics hotline to tell about the ongoing problem, more than once. What makes it scandal, is that those employees got fired afterwards. (Egan 2016, 1-2

But let us first see this from different point of view; The official reason for the termination of those persons were never because they called the ethics hotline.  Of course, Wells Fargo couldn’t just say that, but what iif it is true and those employees got fired for valid reason and the CEO really did not know about this? What could the bank do then to bring justice to the customers whose identity got stolen? They could fire the employees who did illegal actions – and that is exactly what Wells Fargo did.

But no matter who is to blame, it still is a fact that the HR department did a very bad job. The HR department should have taken every complaint seriously, and it should have never discharged any employees because of calling the ethics hotline. Wrongful discharging of an employee can cause a lot of trouble for the company and may cause even a lawsuit.

Also we have learned in previous case 7 that setting too high goals for the employees is a bad thing to do. Wells Fargo is a perfect example of what happens if the goals are set too high. This should teach lesson to every HR Department in any company, anywhere in the world.

Sources

BBC 2016, 1-2. Wells Fargo boss urged to resign over accounts scandal.

URL: http://www.bbc.com/news/business-37419968

Accessed on the 09.05.2017

BBC 2016, 1. Wells Fargo boss John Stumpf steps down.

URL: http://www.bbc.com/news/business-37639648

Accessed on the 09.05.2017

Egan, M. 2016, 1-3. Workers tell Wells Fargo horror stories.

URL: http://money.cnn.com/2016/09/09/investing/wells-fargo- phony-accounts- culture/index.html

Accessed on the 09.05.2017

Egan, M. 2016, 1-2. I called the Wells Fargo ethics hotline and was fired.

URL: http://money.cnn.com/2016/09/21/investing/wells-fargo- fired-workers- retaliation-fake-

accounts/index.html

Accessed on the 09.05.2017