Wells Fargo Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Wells Fargo Corporation Case Study Analysis

Personal motivating factors

The personal motivation factors that motivated the employees to carry out fraudulent activities, were the requirement to the meet the sales target, compensation, reward and appreciation among all employees, for their efficient performance. This was mainly because the low-level employees were not provided with enough wages,due to which each employee had the desire to achieve the sales target and receive the sales reward. In terms of an efficient performance, this also increased the probability of the employees to get promoted.

Internal control failures

The potential internal control failures associated with the fake accounts’ fraud, mainly included the loss of the management’s control over the employees’ activities and the evaluation and monitoring of the internal procedure’s effectiveness against the policies of the organization. The operational services of the organization lacked control environment,which represented a lack of focus towards the auditing process. The auditors of the organization were sued for the fraud. Due to this reason, the organization had now reached to a point of settlement with the federal prosecutors and the Securities and Exchange Commission,to pay approximately $3 billion against the criminal charges and civil actions that stemmed from wide-ranging mistreatment of customers, over the period of 14-years. (Flitter, 2020)

Details of Scam

The details of the scams mainly included the movement of funds from the existing accounts of customers into new or fake accounts that were created without any consent or knowledge, according to the regulators. As described by the CFPB, such practice of the employees at Wells Fargo was referred to as wide-spread. Customers who had their accounts in the bank,were charged for the overdraft fee or insufficient funds,because they did not have enough amount in their original accounts. Additionally, the employees at Wells Fargo also submitted 565,443 applicationsfor credit card accounts. According to a rough estimation;around 14000 accounts were known to incur more than $400,000 in fees, which mainly included over-draft protection fees, interest charges and annual fees.

As a total, approximately 190,000 accounts were slapped with unnecessary fees,which were previously known to be around 130,000. Another problem discovered by the management of Wells Fargo was that the enrollment of thousands of customers was associated with an online bill payment system, without any authorization from the customers. The review of the analysis represented approximately 528,000 unauthorized enrollees for online bill payment. (Egan, Wells Fargo uncovers up to 1.4 million more fake accounts, 2017)................................

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