Sample Solution

Wells Fargo has been embroiled in a multi-year scandal involving the creation of millions of fraudulent accounts. It was found that employees had opened unauthorized bank and credit card accounts without customers’ consent, resulting in fees and other charges to customers. This led to government investigations and multiple settlements with regulators, including a $3 billion fine from the Consumer Financial Protection Bureau (CFPB). In addition, Wells Fargo has faced numerous lawsuits from consumers who claim they were wrongfully charged due to these fraudulent accounts.

To understand the issue, it is important to analyze both the root cause of this problem as well as its broader implications for Wells Fargo’s reputation and financial health. The primary cause appears to be an overly aggressive sales culture at Wells Fargo which incentivized workers to open up unapproved accounts in order to meet their quotas. This practice was enabled by inadequate oversight from senior management, who failed to recognize or address these issues until after media reports surfaced about them in 2016.