Another week, another banking controversy. American bank Wells Fargo has been thrown into the public eye this week over long lasting and blatantly unethical business practice. Clearly this is not the first time a major bank has faced scorn for unethical actions and surely it will not be the last. Although unfortunately regular, it is important that consumers and the business world alike both analyze such an exposé from a business ethics standpoint in order to avoid their re-occurrence.

The exposé revealed that Wells Fargo employees have opened approximately 1,500,000 bank accounts and applied for 500,000 credit cards by skirting consumer consent through the use of fake email addresses (Bloomberg L.P., 2016). To begin, this practice is unethical in its lack of consideration for the consumer’s consent. It is extremely unethical for a business to force its products upon consumers especially in a case such as this where the product is often one with associated fees (in this particular case, regulators estimate that the accounts in question brought in around $2,000,000 in fees (Bloomberg L.P., 2016)). Despite taking steps towards amends by offering to pay back any fees in question and accepting the fines set out by regulators, the most significant damage will be to Wells Fargo’s reputation.

Furthermore, this clear violation of consumer trust is even more painful for Wells Fargo given their industry. How can the impacted consumers expect to trust Wells Fargo with holding their money when they now know that the very bank they trusted to safeguard it was quietly snatching it away from them? Therefore it is clear that ethical business practice is not only the right thing to do but also makes sense from a customer relations perspective as well.

In my opinion, the most intriguing aspect of this controversy from an ethics standpoint is that it was not a plan of Wells Fargo executives but by thousands of low-level employees. This is because of the harsh penalties the employees faced if they missed unrealistic sales goals. One employee went as far as to say that facing these sales targets “…became a living nightmare” and that “…It  drove  [him] to drink.” (Charlotte Observer, 2016). I would argue that Wells Fargo’s sales system –with such harsh penalties and unrealistic targets that it leads to wide spread fraud and in some cases damage to the personal lives of employees– evidences a lack of care for its employees and absence of their fair and ethical treatment. In the future, Wells Fargo and all other companies must carefully consider the effects of their policies on employee behavior and strive to succeed through ethical business behavior.

Associated Sources:

https://www.bloomberg.com/view/articles/2016-09-09/wells-fargo-opened-a-couple-million-fake-accounts

http://www.charlotteobserver.com/news/business/banking/bank-watch-blog/article100975597.html

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