Wells Fargo Fake Accounts Crime

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Wells Fargo is a bank, which was recently accused of having fake accounts, created without notifying its customers. Arguably, a business cannot exist for a long time without using sustainable practices that satisfy the needs of its clients. Wells Fargo designed its key performance indicators (KPI) system for employees that was unreasonable and failed to review it even after 5,300 people were fired for opening fake accounts. This paper will examine the questions of responsibility for this fraud, the mitigating factors of employees’ actions, and future policies that this bank should implement to avoid a similar problem. This will be executed by examining articles by Levine and Barro and answering questions about Wells Fargo’s case.

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Ultimately, upper management is responsible for the fraud that these employees committed. Firstly, the company was fined $185 million, with no legal charges for the actual employees, suggesting that from a legal perspective, these actions were the bank’s responsibility. Next, 5,300 is a large number of people, even for a company that employs a quarter of a million individuals.

Despite having to fire about 2% of their employees for the same reason – opening fake accounts, the management did not address the problem. Finally, performance indicators should align with the company’s strategic objectives, such as increasing customer loyalty to ensure long-term profitability. As Levine states, “no one feels extra loyalty because they have a banking product that they don’t use or know about.” This means that the performance measurement system was poorly designed in the first place, failing to address the critical objectives of Wells Fargo.

The main mitigating factor that lessened employee culpability is the lack of actual financial harm caused to Wells Fargo’s customers. As Levine and Barro note, the bank did not make a lot of money from these operations, in total, they accumulated approximately $2 million, which is $1.14 per fake account. The employees themselves did not want to cause harm to clients. Hence, they often performed operations and opened accounts that would not be noticed by the customers. However, this did cause distress and problems, such as theft of personal data and the misuse of banking information of the clients, which are intangible consequences of the employee’s actions.

Wells Fargo should implement new policies and practices to ensure that this issue does not happen again. Mainly, the management should redesign the KPIs, making them more reasonable. Additionally, they should focus on working towards creating a better organizational environment, where their workers do not feel pressured or threatened to do something in fear of losing their jobs or not receiving benefits.

Finally, Levine mentioned that Well Fargo only profited $450 from each fired employees’ actions, while it is presumably more costly to hire a new person. Hence, the practices of managing human resources should be changed to create a long-lasting partnership with the employees. To compensate the customers, apart from the refunds issued by Wells Fargo and a $185 million fine, the company should present a new strategy that will ensure that this fraud does not happen again.

In my opinion, Wells Fargo fired the 5,300 employees fairly, since they violated the rules of the bank and laws protecting customers. However, the bank’s management should have investigated the issue further since the number of employees that were fired is substantial. Another reason is that it is unclear whether the employees addressed the problem of unrealistic expectations of the bank by talking to their managers. However, one problem with this is that “managers constantly hound, berate, demean and threaten employees to meet these unreachable quotas” (Levine).

It appears that the organizational culture of Wells Fargo created this hostile environment for the employees, where they could not address any concerns they had and to keep their jobs they committed fraud. Despite this, it would be wrong to completely overlook the fact that these employees created fake accounts or lied to customers about banks’ products since those are immoral actions. Thus, the employees were treated fairly because they violated the policies. However, the management is guilty of not addressing the problem once it emerged as well.

Wells Fargo also fired whistleblowers, which also indicates the overall approach of this bank towards managing internal issues. I think that corporations should protect the whistleblowers, because these people can point out issues, such as inadequate KPIs and fraud associated with them, to the upper management before it becomes a severe problem. By firing these individuals, Wells Fargo demonstrated that they could not tolerate the truth about their mistakes, which is also an issue of organizational culture. Therefore, whistleblowers should be supported by the organization to avoid controversies and allegations similar to those faced by Wells Fargo.


In conclusion, Wells Fargo received a fine of $185 million and reputational damage because of its improper policy for incentivizing employees to offer more services to the customers. As a result, 5,300 individuals were fired by the bank for opening fake accounts. One outcome of this case that teaches managers a valuable lesson is that the bank received a profit of only $2 million from these fake accounts while being fined for $185 million by government agencies. Moreover, it is possible that customers who were unwillingly engaged in this scam will not be loyal to Wells Fargo.


Barro, Josh. “Wells Fargo’s scandal is a cautionary tale about incentive pay”. Business Insider. 2016. Web.

Levine, Matt. “Wells Fargo Opened a Couple Million Fake Accounts.” Bloomberg. 2019. Web.

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BusinessEssay. (2022) 'Wells Fargo Fake Accounts Crime'. 20 November.


BusinessEssay. 2022. "Wells Fargo Fake Accounts Crime." November 20, 2022. https://business-essay.com/wells-fargo-fake-accounts-crime/.

1. BusinessEssay. "Wells Fargo Fake Accounts Crime." November 20, 2022. https://business-essay.com/wells-fargo-fake-accounts-crime/.


BusinessEssay. "Wells Fargo Fake Accounts Crime." November 20, 2022. https://business-essay.com/wells-fargo-fake-accounts-crime/.