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Avoid the Scandal; Hire Ethical and Honest Employees

Avoid the Scandal; Hire Ethical and Honest Employees
From Recruiter - September 27, 2016

The news is out regardingWells Fargos recent fraud allegations, and the bank now faces $185 in million fines for opening unauthorized accountsthe largest penalty ever imposed by the Consumer Financial Protection Bureau (CFPB).

According to the CFPB, Wells Fargo employees opened more than 2 million deposit and credit card accounts and transferred funds without consent from customers. Wells Fargo plans to refund $5 million to customers who incurred fees from these unauthorized accounts. At an average of $25 per refund, this incident has affected at least 200,000 Wells Fargo customers.

In addition to the refunds and penalties, Wells Fargo will also suffer a serious blow to itsbrand reputation, which is built on trust, according to CEO John G. Stumpfs corporate value statement. Following what CFPB Director Richard Cordray calls outrageous conduct and a violation of trust, Wells Fargos hard-won reputation as a Main Street lender is under severe scrutiny.

So far, 5,300 employees have been fired in connection with this incident, and Wells Fargo is now in full damage-control mode, working to make it right, as Stumpf said in a letter to customersearlier in September.

But the question remains: How did Wells Fargo end up with 5,300 employees who were willing to commit fraud?

The CFPB blames Wells Fargos incentive-compensation program for making these illegal practices possible. But that cant be the root of the problem, because simply having the option to commit fraud does not make people commit fraud. (And plenty of people have committed fraud outside the context of a sales incentive program.)

No company should have to ask, If I put an incentive program in place, will my people abuse it? If thats a real concern, then you have a culture and leadership problem, not an incentive problem.



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