Wells Fargo Bank, N.A.: The Fake Accounts Scandal

Published 29 Nov 2019
Reference 6430
Industry Banking
Region North America
Length 19 page(s)
Language English

After years building a solid customer base by cross-selling its financial service offerings, Wells Fargo was engulfed by a scandal over unauthorized accounts opened in customers’ names. Regulators discovered that hundreds of thousands of fake accounts had been opened by bank employees scrambling to meet sales quotas. Was it the work of rogue employees, or the result of an unethical corporate culture coupled with an unrelenting drive to “sell, sell, sell”?

Teaching objectives

1. To analyse factors that explain unethical behaviour in businesses. 2. To determine whether “bad apples or bad barrels” are the origin of organizational misdeeds. 3. To consider how the causes of organizational misconduct may be mitigated by responsible business leadership, organizational design and corporate governance. 4. To examine corporate hypocrisy in a context where an organization with an excellent banking reputation is nonetheless cheating its customers. 5. To use the ‘fraud triangle’ framework to explore the risks of organizational misconduct.

  • Organization misconduct
  • Business ethics
  • Leadership
  • Fraud triangle
  • Stretch goals
  • Rogue employees
  • Sales quotas
  • Corporate culture
  • Corporate hypocrisy
  • Consumer banking
  • Mis-selling
  • Rationalisations
  • Risk management
  • Sales incentives
  • Q11920