Wells Fargo bank was suspected of using unethical ways in order to improvise their sales numbers without authorization from their fellow customer. This strategy sustained for more than a decade before it was divulged in 2014 and fine was imposed of $185 million by the Consumer Financial Protection Bureau. The scandal was performed by the sales employees of the bank by opening an alternative checking account of the existing customers and issuing credit cards in their name without their authorization. Since the customer is unaware of any alternative account opened under his name, he won’t perform any activity and then the bank would charge them for the same.
A 15-page report was published recently which disclosed that the regulatory body of the Wells Fargo Bank had received hundreds of complaints and whistle blowers against the unethical practices adopted by the sales employees of the bank. The regulatory body who was supposed to take actions and stop these activities in a timely manner had accepted their no action role in this report. They accepted that they neglected the whistleblowing complaints and uncertain employees’ termination activities were a part of the scandal and failed to take any actions to stop them.
The regulatory body also accepted that they cross-examined an executive in 2010 related to the scandal but still failed to question the bank and get a legitimate response to justify their activities. The report clearly mentioned that the increase in the number of new checking accounts without any deposits or activities were a clear indicator of the scandal which was initiated since 2000. The number of new checking accounts with the same customer name increased from just 63 in 2000 to more than 680 by 2004.
Timothy J. Sloan, the chief executive of Wells Fargo claims that the report disclosed some very serious issues and acts which were very difficult to accept and agreed that this scandal has changed the perception of their customers towards them. The report also held the ex-Chief Operating Officer John G. Stumpf to be responsible to some extent for the scandal. The report highlighted some of his strength which helped the bank to flourish and also few mistakes which he made during his reign.
Carrie L. Tolstedt is another name involved in the controversial scandal who was allowed to retire in the beginning but later due to certain issues fired from the organization. Ms. Tolstedt was unavailable to provide an explanation and also claimed the report’s description to be false. She was also cross-examined in 2010 about the whistleblowing complaints however she denied about any such issues at that time.