How the wheels came off Wells Fargo’s 160-year stellar reputation
The latest corporate scandal to chisel away at consumer trust comes to us from the venerable banking establishment known as Wells Fargo. This modern bank has always traded on the historic imagery that has become part of popular culture. Founded in California in 1852, Wells Fargo soon became synonymous with the safe, fast, and timely delivery of packages throughout the West. The delivery service was such a huge part of American history that Meredith Willson even wrote a song about the “Wells Fargo Wagon” for the 1957 musical The Music Man.
Fast forward 163 years to 2015 and you’ll find the company on the Forbes list as the 7th most respected company in the world. That’s not a position you stumble upon. That’s years of hard work, good leadership and a true feel for customer service. But while we were all out here admiring Wells Fargo’s good reputation, people inside the company were struggling to cope with outrageous demands and a company-wide secret.
Over the past five years, Wells Fargo employees opened more than 2 million bogus bank accounts and fraudulent credit card accounts. The bank collected more than $400,000 in fees on these accounts and now we’ve learned that the woman at the top of the chain took home $124 million as a reward for her years of fine work.
How did this happen?
Easy. Employees say there was so much pressure put on them to open new accounts that they felt like they had no choice but to cross the line in order to keep their jobs. What’s worse, they say managers knew about the fraudulent and sympathy accounts (from friends and family who agreed to open accounts or apply for credit cards with no intention of keeping the accounts) and encouraged the behavior.
Let’s be clear about this. These weren’t malicious acts meant to defraud the public. These were the acts of people desperate to keep their jobs. Now, every person who has a Wells Fargo account is going to lay awake wondering if they’ve been duped and they’re going to think long and hard about moving their money to another bank.
That’s a 160 year stellar reputation – done in by an onerous corporate culture.
Think this is an odd, one-off scenario? It’s not. I used to work at a popular retail chain that expected every salesperson to sell more than $300 of merchandise to a single customer every week. Guess what happened? Some employees got their friends to come in and buy $300 worth of clothes then return them to another store in the chain to get the money back. Employee A got to keep their job and the other store took the hit for the return.
Every company has sales goals. You don’t stay in business by bringing in less revenue than you made the year before. But how much pressure are you putting on your people to make those goals? People who feel threatened, beaten down or overwhelmed often make bad choices and when their bad choices go public, it’s the company that takes the heat.
To avoid a situation like this where you work, make sure goals are reasonable and attainable. Make sure managers at every level are adhering to company policies and give every employee a method of expressing their concerns without repercussions.
Sadly, what happened at Wells Fargo was not an isolated incident. It was an infestation that involved 5,000 employees over the course of five years. I started out asking the question ‘how did this happen’? I realize now, that the questions we should be asking is ‘how did it go undetected for so long’?