The Failure of Wells Fargo
Wells Fargo has become one the greatest disappointments of 2016 by failing its clients and getting on the list of Consumer Financial Protection Bureau. As a result of the failure Wells Fargo has lost the trust of the public and is now expected to apply utmost efforts to restore it.
Among the greatest failures of the year 2016 was the one of Wells Fargo, a well-known bank that offers a great spectrum of services. The bank has been accused of creating unauthorized accounts and using personal data of its clients without their consent. As a result, the bank’s employees forced new accounts and funding fees on the clients in most cases leaving them ignorant of the fact (Consumer Financial Protection Bureau, 2016). According to Glazer et al. (2016), there were numerous cases with clients of the bank being charged to pay the fees they had no understanding of. As a result, the bank was fined for $185 million along with full the compensation it had to provide for its clients. The bank hired a number of independent consultants that have to analyze the current state of bank affairs and the problems it has to eliminate.
The greatest mistake that caused the failure of the business on the US market as well as the loss of the public trust was its poor governance. Evidently, there was no proper management of the bank accounts. As stated by Consumer Financial Protection Bureau (2016), the bank set a number of targets that, when reached, would ensure that employees get incentives. Such a strategy provoked them to come up with the idea of creating unauthorized bank accounts using the valid information they retrieved from the existing bank accounts, thus leaving the clients with 3-5 deposits. They were also determined enough to create false e-mails and PINs. This leads to suggest that apart from the poor management that was surely not expected from one of the most successful banks of the country, the goals set by the management circle for the year were extremely high and unjustified.
The question whether the failure taught Wells Fargo a lesson can only be discussed as soon as the issue is settled. Nevertheless, there have been some considerable changes in the life of the bank. For instance, it has agreed to pay fully the fine of $185 million, trace all of the unauthorized accounts and people who were suggestively victims of the bank fraud and return the money they were demanded to pay. Secondly, the CEO of the bank was replaced by Timothy Sloan who promised to make the failure his immediate concern. Finally and most importantly, the bank has hired independent consultants that would be in charge of ensuring unauthorized bank accounts are eliminated and no incidents of the kind are provoked. Therefore, Wells Fargo has reacted well on the problem, yet there is no guarantee the implemented changes will bring back the trust of the public it used to have.
Wells Fargo, one of the biggest …
