This is International Fraud Awareness Week. It is a creation of
the Association of Certified Fraud Examiners.
ACFE has released a list of 5 Fraud Tips that
Every Business Leader should act on.
The first tip is vital: Be Proactive - 'Adopt a code of
ethics for management and employees'. But a code alone
isn't enough: it has to be enforced. And management should ask:
'What is the culture here, and does it allow employees to
Wells Fargo Bank in the USA is a recent example of a code of
ethics not being enforced. The result? Fraud.
A sales target culture motivated staff to commit fraud: two
million bank accounts were opened without customer authorisation.
This led to some customers having unknown overdraft accounts, lines
of credit and credit cards. These affected their credit
"Managers often tell employees to do whatever it takes to
reach their quotas," alleged former Wells Fargo employees.
They described intense management pressure for staff to meet daily
sales targets by opening new accounts - sometimes up to 10 accounts
a day. Others say that that managers told them to open phoney bank
accounts and were sacked soon after notifying the ethics
Since this issue has come to light, Wells Fargo has fired over
5,000 employees. Clearly this not just 'a few bad apples'
(the term used by the then CEO John Stumpf, to describe the
problem). It suggests a business-wide cultural problem.
Wells Fargo has now issued a public mea culpa,
re-working its performance measures to focus more on customer
satisfaction, loyalty and ethics. It is also eliminating product
sales goals for anyone in the retail banking business "to make
certain nothing gets in the way of doing what is right for
Wells Fargo had to pay fines of USD 185 million – in
addition to the huge blow to their reputation.
So while ACFE's 5 Fraud Tips are a great start –
enforcing the code of ethics is vital.
You can learn more about the fraud at Wells Fargo at This
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