Feel free to call the recent class action lawsuit against Wells Fargo full circle ethics, or even more to the point: “What comes around, goes around.”
No matter how you want to call it, Wells Fargo is about to pay customers $110 million as part of a class action lawsuit resulting from its fake-accounts scandal.
You may recall that Wells Fargo employees were literally forced by management to open up fake bank accounts for customers who never wanted them. The $110 million to resolve the class action lawsuit comes on top of the $185 million in fines brought against Wells Fargo by the city and county of Los Angeles for its sales practices.
The differences between the two lawsuits is that one of them is “political,” it concerns the legal implications of fraud, consumer protection and regulations. The other lawsuit puts money back in the pockets of consumers who were taken for a ride by the bank.
Wells Fargo CEO Tim Sloan
The CEO of Wells Fargo, Tim Sloan recently said: “This agreement is another step in our journey to make things right with customers and rebuild trust.” Here’s a copy of Wells Fargo’s Ethics Standards.
Wells Fargo had better step lively because they have a lot of trust to rebuild. There is already conversation that the bank may try to block the class action lawsuit by wanting to go to arbitration with the disgruntled customers. This possibility signifies that Wells Fargo, caught with their hands in the poor ethics cookie jar, still has not learned its lesson. They have played these games with customers before.
It is the bank’s right under the law, of course, to put up road blocks to make it difficult for customers to reclaim their funds and to recoup the time and inconvenience created by the deceptive sales practices of the bank’s hierarchy. However, they may want to know (if no one has yet told them), that sooner or later they will lose a lot more than $110 million in business over this stuff. In this age of social media and ratings, their practices will come back to haunt them. They are welcomed to continue to play games, but their former customers will continue to hammer away at them.
All of this, from the first deceptive sales practices in 2009, where retail bank employees were pressured to open false accounts, down to the present day, could have been averted. Despite its immense operations and billions in assets, Wells Fargo is no different than the unethical car mechanic on Main Street who “encouraged” the assistant mechanic to charge for services that were never needed and worse, never performed.
Ethics need to be taught. Unethical oversight needs to be imposed at Wells Fargo and whether Mr. Cook and the tens of thousands of employees of his organization want to admit it or not, every one of their unethical choices had consequences.
Middle management on up, especially in the retail banking functions, needed to understand the consequences of their actions. When a customer suddenly discovered that “they” had opened three, four or more new accounts, what did the retail geniuses within the bank’s infrastructure believe the outcome might be? Did they not think that the customers would object?
Why then was there no ethical oversight? When those in charge of retail banking suddenly showed performances that went from so-so to incredible, did no one think to ask how this was occurring? Were there not employee complaints that filtered through HR? Were the employee complaints ignored or mocked as those ethical employees began to leave?
What then, of the consequences? Wells Fargo has yet to fully feel them. Mr. Cook and his minions can, of course, fight the class action lawsuit but there is no fighting ethics. The bank has a clear-cut choice and I suggest they are wise in the path they take.
