Will Customers Punish Wells Fargo’s Misdeeds?


Share on LinkedIn

Will Customers Punish Wells Fargo’s Misdeeds?

By now almost everyone has read or heard about Wells Fargo creating over two million fraudulent checking and credit card accounts from 2011 to 2015. Wells Fargo fired 5,300 bank associates who were part of the scheme and paid a $185 million fine. The CEO, John Stumpf, has been testifying in front of Congress.

My question: “It sounds really bad, but will customers punish Wells Fargo for their misdeeds?”

I can only hope so. Otherwise, other companies will continue to take advantage of customers too. If you can’t trust a bank; who can you trust? Wells Fargo is the third largest bank in the US and was founded in 1852.  When bank associates opened up millions of fake accounts, the credit ratings of Wells Fargo customers could have been negatively impacted. Good credit is a precious asset. It’s difficult to maintain and can take up to seven years to rectify and remove a mistake. Wells Fargo did not fire all the associates involved in the scam at one time. The bank dismissed approximately 1,000 associates over a four-year period. They knew about the issues long before the public or government regulators understood the breadth and severity of the problem.

Let’s examine the penalty, $185 million. It sounds like a great deal of money. Additionally, Wells Fargo was forced to set aside $5M for customers who were affected; that’s approximately $20 per customer, an amount that doesn’t amount to anything. According to the latest quarterly financials, Wells Fargo made $5.7 billion or the equivalent of $23 billion on an annual basis. The fine is less than 1 percent of their profits. Congress is grilling the CEO, as well they should.  They want him to take a reduction in pay, but I guarantee that whatever the decrease, Mr. Strumpf’s lifestyle will not have to change.  He will not need to search the Internet for a new position in order to support his family.

In preparation to write this post, I looked at Wells Fargo Values, the mission statement on their corporate site.  It certainly got my attention!

Wells Fargo:  Our Values

We have five primary values that are based on our vision and provide the foundation for everything we do:

  • People as a competitive advantage
  • Ethics
  • What’s right for customers
  • Diversity and inclusion
  • Leadership

Banks keep valuable assets protected in the vault. Apparently, Wells Fargo’s Values must have been stored away, far away, where no one could see or follow them. Number two – Ethics; number three, What’s right for customers and the last, Leadership all get failing grades.

We live in a society where industries must be regulated, including banking. Regulations act as guidelines and deterrents.  In this instance, neither were followed. Wells Fargo coerced their associates to throw customers under the bus so that they could keep their jobs. I’m not blaming the associates. The blame is squarely on all senior level executives who not only were aware of the subterfuge, but condoned it.

The lesson to be learned?  My hope is that current and prospective customers will only do business with institutions that value the customer as their number one asset.  I often say, “I’m not sure what they were thinking!”  In this case, Wells Fargo executives were only thinking, “What’s in it for me?”

Do you think the consumer marketplace will penalize Wells Fargo or will all be forgotten?

Republished with author's permission from original post.

Richard Shapiro
Richard R. Shapiro is Founder and President of The Center For Client Retention (TCFCR) and a leading authority in the area of customer satisfaction and loyalty. For 28 years, Richard has spearheaded the research conducted with thousands of customers from Fortune 100 and 500 companies compiling the ingredients of customer loyalty and what drives repeat business. His first book was The Welcomer Edge: Unlocking the Secrets to Repeat Business and The Endangered Customer: 8 Steps to Guarantee Repeat Business was released February, 2016.


  1. Hi Richard, the sad truth is that it will all be forgotten; people’s attention spans are too short. Additionally, it is generally still pretty hard to change banks, with all the direct debit authorizations, credit cards, etc running against an account, not to mention salary going in there.

    Imo issues like these can be tackled only on a regulatory level:
    – it must be as simple to change a bank as it is to change your energy supplier: Just a few clicks
    – penalties for the institutions when breaking foundational assurances must be significantly higher
    – there need to be significant – and I mean SIGNIFICANT – penalties for the involved executives; this does not only include money

    Just 2 ct from Down Under

  2. Thomas, once again, thank you for your thoughtful and detailed response. Your insight and suggestions are extremely helpful. Richard

  3. When it comes to customers making a buying decision, ‘punish’ sounds harsh. Though it’s possible there are vindictive people who characterize their choice that way. And I certainly don’t blame them. Similarly, ‘penalize’ sounds harsh also. That word better fits what investors have done in valuing Wells Fargo’s stock.

    To keep to the spirit of your question, I suggest rephrasing it slightly: ‘Will customers (and potential customers) who know about Wells Fargo’s misdeeds avoid doing business with the bank?’ I believe the answer is yes.

    The corollary question is ‘will that have a meaningful financial impact on Wells Fargo?’ The answer to this question remains to be seen. In part, it depends on how Wells Fargo’s new management perceives things, and how investors spin the performance indicators that they watch closely. Now is not a profitable time for banking institutions, so it will be difficult to tease out the consequence of Wells Fargo’s bad ethics from the other forces that will likely depress banking stock prices.

    Thanks for pointing out the hypocrisy in Wells Fargo’s Vision and Values Statement. I cited this in an article, Anatomy of a Scam: Wells Fargo’s Treachery Can Happen Anywhere. http://customerthink.com/anatomy-of-a-scam-wells-fargos-treachery-can-happen-anywhere/. It’s easy to be an armchair quarterback when examining this scandal, but a major culprit is another one of Wells Fargo’s stated core missions: growing revenue. Clearly, that one simply steamrolled putting customers first, and rendered it meaningless in the company’s culture.

  4. Hi Andrew, thanks for not only commenting on my blog post, but giving us the link to your poignant and interesting blog that was posted in September. Everything you wrote is 100 percent on target. Just in the last day, the CEO did step down, which does rarely happens these days. So, I guess they are trying to make amends with their customers. Hopefully, other steps will start to build back trust. Richard


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here