“It takes many good deeds to build a good reputation, and only one bad one to lose it.” ~Benjamin Franklin
In September of 2016, it was disclosed that Wells Fargo had created 2.1MM fake or fraudulent accounts to meet sales targets. The leaders involved at the time were let go with fat paychecks, but the CEO was only let go 6 months later after public outcry threatened to tank the stock even further. I wrote about it at the time and called it not only a failure of leadership but a prime example of a corrupt culture that rewarded fraudulent behavior. It was one of the biggest PR black eyes of 2016. Millions were paid in restitution and 5K employees lost their jobs for doing what the company rewarded them to do.
The board claimed the company was not living its values (duh!) and that it was a momentary lapse in an otherwise spotless record as a good corporate citizen. They made assurances that they had righted the ship, made replacements, and nothing like that would ever happen again.
I was fascinated watching the company spin the story. Rather than call what happened opening fake or fraudulent accounts, or cheating, they called it “aggressive sales tactics.” This spin did not even come close to naming what actually happened – fraud and stealing from innocent customers.
Now, Wells Fargo is in the news again, for you guessed it, fraud. This time they tacked insurance on to car loans that customers did not ask for nor did they need. When they didn’t pay for the insurance, Wells Fargo had their cars repossessed. The number of people given insurance they didn’t need? 490K. Another example of “aggressive sales tactics?” It’s time to speak some truth here, this a culture gone very wrong.
Charging customers for things they did not ask for has become their way of doing business and their culture continues to reward this behavior. Ultimately, it doesn’t seem as if anything at the bank has changed. The sheer volume of the new fraud indicates that multiple people likely knew this was going on. Where were the watchdogs? Why didn’t the board and leaders put processes and procedures in place to make sure this type of thing didn’t happen again? Here’s the reality. They were watching their share price rise and they were willing to do whatever it took for that to continue.
Culture is set at the top of an organization, embraced by the middle, and lived at the bottom. People were behaving in alignment with the current culture. Wells Fargo needs a cultural reset and that starts with saying goodbye to the board and cleaning house of upper management. Until then, the next scandal is right around the corner.
Image credit: By The original uploader was Henry W. Schmitt at English Wikipedia (Transferred from en.wikipedia to Commons.) [Public domain], via Wikimedia Commons