The Wells Fargo Commercial Banking Scandal

12 Pages Posted: 30 May 2017 Last revised: 6 Nov 2017

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Cameron Cutro

University of Virginia - Darden School of Business

Abstract

On October 25, 2016, Timothy J. Sloan, the new CEO of Wells Fargo bank, apologized to 1,200 of his employees in Charlotte, North Carolina. Sloan had been named to the company's top position two weeks earlier, when then-CEO John Stumpf resigned amid fallout from the banking scandal for which Sloan apologized. In September, Wells Fargo had agreed to a $185 million settlement with the Consumer Financial Protection Bureau (CFPB) and two other regulatory bodies, admitting it had opened unauthorized accounts for millions of its consumers. At the heart of the scandal were the company's community banking sales practices, which focused relentlessly on cross-selling multiple products to existing customers.

Excerpt

UVA-C-2394

Rev. Oct. 27, 2017

The Wells Fargo Banking Scandal

We've been called, true or not, “the king of cross-sell.”

—Wells Fargo CEO John Stumpf's

2010 letter to shareholders

. . .

Keywords: cross-selling, illegal behavior, banking sales practices

Suggested Citation

Lynch, Luann J. and Cutro, Cameron, The Wells Fargo Commercial Banking Scandal. Darden Case No. UVA-C-2394, Available at SSRN: https://ssrn.com/abstract=2974106

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

Cameron Cutro

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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