Corporate Crisis Messaging: Wells Fargo

Corporate Crisis Messaging
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Corporate Crisis Messaging
Part I
Wells Fargo is a multinational financial institution that deals with a broad range of products and services, including commercial banking, investment banking, personal loans, credit cards, and wealth management. Indeed, it’s headquarter is in San Francisco, California, the United States of America (USA). Wells Fargo serves many customers from the USA and internationally. In 2002, bank managers introduced a new policy that required employees to meet unrealistic sales targets. For instance, workers were expected to open a specific number of accounts. However, the only thing that the bank did not do is to advertise its products and services aggressively to attract new customers so that its employees can meet the set sales goals. As such, workers started falsifying clients’ records, misusing customers’ information, and forging signatures to open fake accounts so that they could meet sales targets (Merle, 2020). That was how the Wells Fargo crisis started, and bank managers knew about it, but they did nothing to combat it. As such, the bank collected millions of dollars, which they charged as fees for the newly registered accounts.
In over a decade, Wells Fargo’s managers did not stop employees from registering new fake accounts through document falsification and forgery. In addition, they engaged in this immoral, unethical, and illegal behavior without the consent of their customers. The situation escalated into a crisis since clients raised alarm when they realized that they were charged for services they did not initiate. The Securities and Exchange Commission (SEC) and the Department of Justice investigated the issue and found that the bank engaged in fraudulent activities. In that light, Wells Fargo was fined $3 billion, which is one of the biggest corporate penalties. Based on the Central District of California’s attorney, Nick Hanna, Wells Fargo destroyed its reputation, which has taken more time to build, for short-term profits and ended up hurting its customers and its community (Merle, 2020). As a result, the Federal Reserve banned the bank from expanding its investment portfolio until it comes up with proper strategies to fix its internal organizational cultural issues.
A corporate crisis is a situation that threatens organizational operations and their existence (Coombs, Holladay, & White, 2020). Wells Fargo’s event was not a conflict since the bank leaders knew about the consequences of the aggressive sales goals but did nothing to address the problem. Wells Fargo was unsuccessful in managing its crisis until the SEC and DOJ intervened after customers’ uproar. Notably, bank managers ignored the crisis and thought that the institution was generating revenues by charging their customers for non-existent services they had not requested...