Amid backlash from consumers and lawmakers alike, Wells Fargo took steps to address the recent news of wrongful sales practices on its main public site. The firm opened over two million unauthorized accounts in a span of five years. While the press releases, statements and letters describe the event and the subsequent actions taken to fix the problem, the firm did not publicize the proceedings on the private client brokerage and bank sites or through an email sent directly to clients, the places concerned clients are most likely to check. So the question remains, is Wells Fargo doing enough to keep clients informed?
Immediately following the news of the settlement deal, Wells Fargo added a homepage banner image bearing text “On the Side of Our Customers” along with a link to an article detailing the firm’s commitment to clients and the five actions it is taking in response to the misconduct. Pledging to eliminate all product sales goals for retail bankers is the most valuable and drastic step taken, and the firm dedicated a press release to this change in sales practices. Both employees and government officials largely blame this sales tactic for the misconduct because employees were required to meet certain targets, thus clouding the judgement of some employees and placing client interests on the backburner.
During the recent Senate Banking Committee Hearing, Wells Fargo Chairman and Chief Executive John Stumpf provided a written statement in which he apologized profusely and stated that the firm was dedicated to regaining the trust of clients and the American people. At the hearing, Stumpf defended the company culture and was unable to comment on whether or not high-level executives will face repercussions or bonus and salary clawbacks, instead saying that the Wells Fargo Board will make the final decision.
Additionally, the firm chose to address the issue publicly only after the scandal hit the mainstream media. Wells Fargo had been internally addressing the issue for the past five years, both firing employees and reimbursing clients for their losses. The firm could have regained clients’ trust with honesty from the start of their internal investigation, with either an email to clients or a notification on the Wells Fargo site, such as Scottrade did when addressing a disparate scandal in the fall of 2015. As covered in Corporate Insight’s October 19, 2015 e-Monitor Update, Scottrade quickly notified clients of the external security breach that had comprised the personal information of 4.6 million clients through announcements on its public and private sites as well as with an email describing the proceedings. The firm also offered affected clients free identity protection service for one year following the breach. Wells Fargo has yet to offer involved clients any benefits other than a reimbursement for the unwanted products.
Ultimately, it will take more than a multi-million-dollar settlement and a few press releases to regain the trust of clients. While the firm did address the issue in multiple ways on its site, the articles and press releases did not adequately describe the allegations against the company or do enough to quell clients concerns. To regain clients’ trust, Wells Fargo should provide clients with employee accountability and increase transparency by specifically detailing how the changes will improve the client experience.