The Wells Fargo fake accounts scandal is one of the most popular topics in in the past couple of weeks. There are many issues and concerns that have come to the surface as result of the scandal. Everyone is blaming the internal culture, internal control, auditors, executives, etc. But are they the only one to be blamed. What about the customers, should we also put the blame on them?

1. Who Should We Blame?
Wells Fargo Fake Accounts Scandal
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2. Wells Fargo fake accounts scandal - Overview
• Public informed on 8th of September 2016 that Wells Fargo employees
have created ghost accounts.
• Fake accounts have been opened since 2011
• More than 2 million phony accounts created
• 1,5 million savings accounts
• More than 500,000 credit card accounts
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3. Reasons for the creation of ghost accounts
• Wells Fargo internal procedures in relation to bonus rewards
• Sales incentives structure
• Because of the sales incentive culture of Wells Fargo, employees
opened fake accounts to earn unwarranted fees.
• Major motive – EARNING MORE MONEY
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4. Consequences from the Wells Fargom fake
accounts scandal
• 5,300 employees fired because of the scandal
• Wells Fargo should pay $185 million in fines
• $5 million to refund customers
• Possible clawback of Executeive bonusis
• Damaging the trust in banking system
• The sustainability and adequacy of sales incentives structure becames
debatable
• Decrease in Wells Fargo value – Loss for investors
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5. Should we put the entire blame on Wells
Fargo?
• Yes, Wells Fargo is responsible for the fake account scandal
• Weak internal control
• Executives were looking the other way (most probably) to earn
millions in bonuses
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6. Customer’s partial responsibility in Wells Fargo
scandal
What should we ask about the customer behavior:
• How come customers are not aware what bank products they are
using?
• Why customers have accepted to blindly pay different fees and
charges, for products they didn’t even knew they have?
• Were Wells Fargo employees using customer’s lack of financial
knowledge, or they have been using customer’s ignorance when it
comes to bank products?
• Was it so hard for bank customers to check out the products they are
using in their bank?
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7. Lessons learned from Wells Fargo fake account
scandal
• Customers should be aware about the products they are using
• Customers should pay more attention to the fees they are paying
• Banks should change their sales strategy, they should promote no
fraud culture
• Stronger internal controls
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8. What do you think, do customers have a partial
responsibility for the opportunity leading towards the
fake accounts scandal.
Comment at www.bankactivities.com
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