Please note! This essay has been submitted by a student.
Wells Fargo is the fourth-largest bank in the United States, with its headquarters situated in San Francisco, California. It has come under scrutiny due to fraudulent activity within the company. Through secondary data research made evident in this Case Study, I will be examining the ethical responsibilities Wells Fargo upholds, the UN principle of Corruption which it has been breached, and also recommendations to improve their global responsive business practices. The wrongdoing and unethical business practices by Wells Fargo have tainted a stain in the American Financial sector and society today.
Wells Fargo not only holds ethical responsibilities to their customers but also all stakeholders. Their Vision stated by Wells Fargo Media (n.d.), “We must never lose sight of putting our customers first and helping them succeed financially”, is contradicted as they have been caught engaging in dishonest and unethical business practices. Employees of Wells Fargo, one of the largest banks in the US, have been caught out issuing credit cards without customers’ knowledge and consent. They also used fake emails to sign up customers for banking services. In 2011 and 2015 employees activated over 1.5 million bank accounts and more than 565,000 credit cards which may not have been authorized (Corkery 2013). After some time customers would realize the bogus fees and start to complain.
Wells Fargo has an ethical responsibility to treat its customers fairly. They suggested many different services to their customers. However, Wells Fargo put forward high sales goals which were unrealistic for its employees to achieve. If a customer had purchased more than one service, staff were urged to cross-sell them more. The company had a motto of “Great 8” which meant employees were expected to sell eight financial products within each household. This conflict of interest arises as employees are expected to engage in ethical banking practices, but also on the other hand want to keep their jobs.
Another ethical responsibility Wells Fargo shares are to hold Integrity to its Stakeholders. The business dictionary suggests that Integrity is strict adherence to a moral code, reflected in transparent honesty and complete harmony in what one thinks, says, and does. Additional to integrity helping the team work more efficiently, it will also be acknowledged by the larger market. Nobody wants to invest in a company with bad goodwill and especially one in the public eye of a scandal. Customers are more likely to do so with evident integrity principles flowing through the company.
The Wells Fargo case breaches the UN Global Compact principle of Corruption. Corruption is portrayed as dishonest or fraudulent conduct which is evident in the acts of Wells Fargo employees. By setting up fraudulent accounts and issuing credit cards without their customer’s consent, they have participated in not only unethical business practices but also illegal business practices. Corruption ultimately has many social implications in society. It can take people’s freedom, money, and health. Corruption from employees and managers from Wells Fargo ultimately cost families financial stress and freedom.
Finally, the Wells Fargo case also touches on the principle of labor, more specifically principle 4, ‘the elimination of all forms of forced and compulsory labor.’ Becky Grimes a former employee for 14 years at the company as a branch manager, explained how she retired early because employees were expected to force “unneeded and unwanted” products on customers (Reckard 2016). She also explained how branch managers are obliged to commit to 120% of the daily quotas. The former branch manager also explained how by not meeting their goals they would be severely chastised and embarrassed by the community banking president in front of 60 plus managers. This playful threat puts unwanted pressure and stress on the employees and is unethical.