The Consumer Financial Protection Bureau (CFPB) meted out a $185 million fine that included a $100 million penalty to Wells Fargo in 2016 for their violation and abuse of consumer trust. The San Francisco-based bank, whose employees opened many fraudulent and unauthorized accounts in their customers’ name, now enjoys the dubious honor of shouldering the most substantial penalty the agency has issued since its formation in 2011. Now the question becomes what should Wells Fargo do next?
For those of you who aren't familiar with Wells Fargo’s nefarious activity, thousands of bank employees opened bogus accounts to hit their sales goals from 2011 to 2016. The CFPB said employees made fake PIN numbers and email addresses to enroll unwitting customers in new products—1.5 million deposit accounts and over 500,000 credit accounts in all. Some of the fraudulent accounts incurred fees, around $400,000 worth, from things like annual fees, interest charges, and overdraft protection fees.
So, after destroying the trust their customers felt toward their bank, what should they do now? Wells Fargo should build trust back up again.
Extreme Says It Best for Wells Fargo
Trust is an essential emotion for Customer Experience because it represents an emotional relationship with your customers. Customers that trust an organization have feelings for the company or brand and want to do business with them. They want to feel like they are safe and that the company has their best interest at heart. When organizations destroy that trust, they destroy that relationship, too. Even if the customer continues to do business with them, chances are customers do not feel the loyalty and emotional connection they once did, making it far more likely they will take their leave and their business as soon as something better comes along.
In other words, it’s not that the Wells Fargo customers are loyal. It’s not that they are okay with what happened. They just can’t be bothered to make the changes they need to make to switch banks (yet).
Building trust back requires a lot of work. If my co-author for The Intuitive Customer, Professor Ryan Hamilton and I were sitting in front of the Wells Fargo team right now, we would advise them that actions speak louder than words. In the 90s, we all learned an important lesson to a beautiful (and overplayed) acoustic song:
Like the song says, we would have Wells Fargo prove to their customer that their “love for them is real.” We would have them examine what they are doing down to the simple things and how they are doing it to the nitty-gritty details. For instance, building trust requires proving to a customer that you are going to do what you say you are going to do. Therefore, if you tell a customer you will phone them back at a particular time, you should do it. If you say you will deliver something on a Thursday, it bloody well better be there on Thursday then. These little actions show that you are earnest in your efforts to improve and repair relationships with customers.
Another significant challenge Wells Fargo faces is building trust with their employees. This whole situation has been demoralizing for employees. Like their Customer Experience, Wells Fargo will need to rebuild their trust with their employees again, also, and again, actions will speak louder than words. One area we would advise them to consider will be changing their KPIs to Customer Experience and Satisfaction goals rather than sales goals. Both Ryan and I believe that what gets incented gets done.
It’s not an enviable situation to be in, of course. Wells Fargo would likely rather just ignore all of this mess, launch a new product, and try to distance themselves from the scandal. However, to take this tack will only reinforce to customers how little Wells Fargo cares for them and how untrustworthy they are as a financial institution. Wells Fargo needs to start small to fix a big problem.
Wells Fargo blew it with their customers. However, we also firmly believe they will not be the last big company and brand name to do so. The fact is Customer Experience disasters like this one happen more often than any of us would like (Volkswagen, Yahoo, Graco, etc.), and next time it could be your company making negative and damaging headlines. Would you be able to fix things with customers using more than words?
Are you a Wells Fargo customer - have you stayed with them or left in disgust? Tell us your thoughts in the comments below.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.
Follow Colin Shaw on Twitter @ColinShaw_CX
Egan, Matt. “5,300 Wells Fargo Employees fired over 2 million phony accounts.” Money.cnn.com. 8 September 2016. Web. 12 February 2018. < http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/>.
About Colin Shaw
Colin Shaw is founder & CEO of Beyond Philosophy, one of worlds first organizations devoted to customer experience. Colin is an international author of six best-selling books. Beyond Philosophy has a proven track record. They provide consulting, specialised research & training from Sarasota, Florida and London, England. Follow Colin Shaw on Twitter @ColinShaw_CX