Almost a month ago we have witnessed on of the biggest scandals in the banking industry. The gigantic magnitude of the scandal should not be seen from financial perspective. Instead, its magnitude should be seen in terms of number of customers who became victims because of inadequate sales practices. This scandal is the Wells Fargo phony account scandal. The fact that around two million phony accounts have been opened for the purpose of earning fees speaks about the magnitude itself.
But they didn’t stop only to retail banking. The magnitude of the scandal is even more augmented one month after it was exposed. Namely, according to the U.S. lawmaker the inadequate sales practices have been spread over to the small business owners as well. Thus, imposing the need to reconsider once again how far did Wells Fargo employees go to make more money. It is assumed that thousands of small business owners are also victims of the ghost accounts scandal.
This shows that it is time for Wells Fargo to publish the list of all customers (retail banking or small businesses) who have been damaged by the fake account scandal. This should be done under the close supervision by the regulators, for the purpose of assuring that all customers will be compensated for the damage.
The newest information about small businesses being also part of the accounts fraud, raises many questions. Namely, is anybody safe from the misinterpretations and abuse of banks internal procedure and policy? Did the banking sector and regulators learned something from this scandal? Are we going to witness major changes in bank’s internal procedures? And maybe the questions about the customers role in the scandal?
This, as well as many other questions should be answered as soon as possible. All relevant parties should identify the key factors that have opened up the possibility for execution of fraudulent actions over retail banking as well as the small business customers.