Lessons From the Wells Fargo Fiasco

Update: On October 13, CEO John Stumpf resigned from Wells Fargo. “The decision is good news in the short term because it removes a dark cloud of uncertainty that was hanging over the bank,” Ian Katz, an analyst at Capital Alpha Partners, said in a note Wednesday after the company announced Stumpf’s retirement.

You have probably read about the fraud at Wells Fargo & Co (WFC) and the CEO John Stumpf refusing to resign. But what stuck out to me most is that the people selling the credit cards were to blame.

Let’s backtrack.

Right now, store level employees including bankers, cashiers, and bank managers are being blamed for a national $10 million dollar fraud.

Stakeholder theory tells us that we need to be responsible and accountable to all possible stakeholders, including our employees.
Among this basic stakeholder theory is accountability. The Wells Fargo CEO is not resigning and believes he is not to blame. Wells Fargo says it will pay $185 million dollars in penalties, $5 million of that going to customers who say they never requested an account.

The only way a fraud can go on is if no one stops them.
Lessons From the Wells Fargo Fiasco
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Customers are stakeholders too. Shareholders of this large bank will also have criticisms of the organization now that this is national news. It's a giant bank that wants to blame their worker bees for a major national fraud.

What lessons are we to learn from this fiasco?

Well first, the little guy making $12 an hour still gets blamed for major errors. I believe the people who sold these accounts were pressured to do so for commissions, as is the common practice at most banks. Now they are being blamed. Lower-level workers seem to be forever stuck as scapegoats for systemic failures at major institutions.

Second, there is absolutely no accountability at Wells Fargo. If I banked there, I would find a local accessible credit union to use until I can find a different bank to take over my IRA and savings. There is no way I would let these people hold my money.

Accountability is transparency in business operations. The fact that the CEO is not resigning is a major problem. I believe the reputation of Wells Fargo will continue to suffer.

Lastly, this event proves that we cannot trust anyone. Wells Fargo is not heavily advertised and most people believe this is due to word of mouth customer growth.

A majority of Wells Fargo stakeholders don't appear to be a major consideration for the company: That should make you wonder why.
Published on Oct 13, 2016
By Rya Henderson-Carter
Rya is a member of the Editorial Freelancers Association (EFA) and the Professional Editors Network (PEN). A U.S. Army Veteran, and information technology professional for the federal government: She teaches at Argosy University, EDMC, UOPX, and consults in addition to editing. When Rya is not working, she enjoys jazz music.

Copyrighted 2020. Content published with author's permission.

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