Despite it being an uphill battle, Wells Fargo is continuing its attempt to win back customers and improve its reputation. Now, the strategy is to work with customers to make it right, on a one-on-one basis.
It’s the next step in the bank’s recovery after Well Fargo’s scandal involving opening consumer bank accounts without their consent or knowledge. The Consumer Financial Protection Bureau fined Wells Fargo $185 million, the largest fine levied from the government agency. It also ordered Wells Fargo to refund $5 million in fees that the bank wrongly charged customers.
There certainly is very little precedent in the banking industry. And the scandal has affected the bank: Retail banking customer activity data for November showed total branch interactions were down 5 percent when compared to October and down 3 percent year over year. The bank has been releasing these figures monthly after the scandal broke.
However, the one-on-one strategy, according to the Wall Street Journal, starts with the bank learning how many customers had accounts opened without their knowledge. So far, the estimate hovers around 2.1 million accounts, but the bank also must figure out in what way or ways these customers were affected. And from there: the decision as to what to about it, how to fit it and compensate those customers for their trouble.
The question is, how to compensate? What is the magnitude per person?
Some scenarios are hypothetical — for example, like if the scandal caused a lower credit score, which caused a higher mortgage or no loan at all.
To figure out how to make this right with customers, the bank has brought on thousands of its employees and consultants. Millions of dollars are at stake and also fed into the strategy. And at the same time, there are both customers disregarding phone calls and other outreach, while others are willingly raising their hand for help from the bank.
The strategy is a focus of the newly minted Chief Executive Timothy Sloan. Sources say he is in touch with fellow executives daily and is heavily involved in the process. Spokespeople from the bank say that the financial part of how customers were affected is only part of the problem, but building back future trust is the priority as well.
The fines and reputation issues are not the end of the scandal, of course. The bank is still on the hook for more state and federal investigations, both from the Justice Department and the Securities and Exchange Commission.