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Old 06-12-2018, 12:35 PM
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Default Wells Fargo launches ad campaign to leave accounts scandal behind. Not everyone is bu

Why should you trust Wells Fargo? Because rebranding. Thats why.

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Wells Fargo launches ad campaign to leave accounts scandal behind. Not everyone is buying it

By James F. Peltz
May 09, 2018 | 3:00 AM



Deb Gabor was watching television recently when a Wells Fargo & Co. commercial caught her attention.

The ad was part of a new campaign, called Re-Established, that the banking giant began rolling out this week to help it move past its massive fake-accounts scandal and reassure customers.

The commercial opens with the bank's origins in the Old West, references the scandal and fast-forwards to depict dedicated bank employees and happy customers as a narrator assures viewers: "It's a new day at Wells Fargo."

The spot made Gabor perk up because she's chief executive of Sol Marketing in Austin, Texas, whose services include corporate-crisis help, and because she's also a Wells Fargo customer. But the commercial left her wanting.

"This ad campaign leaves me scratching my head and wondering if Wells Fargo is strong enough as a brand that it can withstand this kind of crisis," said Gabor, who felt the ad came across as "really insincere and inauthentic to me, like they were trying too hard."

The scandal surrounding the San Francisco bank stemmed from its aggressive "cross-selling efforts," in which employees created millions of new accounts in customers' names without their consent, such as new credit-card accounts, to meet sales goals.

The tactics were first uncovered by the Los Angeles Times in 2013, and the scandal mushroomed in September 2016 when the bank agreed to pay $185 million to settle investigations of the cross-selling practices by federal regulators and Los Angeles City Atty. Mike Feuer.

Amid the scandal, John Stumpf abruptly resigned as Wells Fargo's chief executive. He was replaced by longtime Wells Fargo executive Timothy Sloan, who's trying to thoroughly restructure the bank to avoid repeating its past mistakes.

The new ad campaign "marks a turning point by expressing how we are fundamentally a different company today," Sloan said in a statement. "While we have made solid progress, we recognize there is still work to be done."

The campaign's advertising is being run nationwide on TV, in print publications, on digital platforms and mobile channels — a campaign analysts said will probably cost millions of dollars.

Its first one-minute commercial, called "Trust," recalls Wells Fargo's origins in the 19th century as a trusted carrier of gold and other goods by stagecoach, noting that "we always found the way — until we lost it," a reference to the scandal.

The commercial's narrator goes on to say Wells Fargo is making "a complete recommitment to you, fixing what went wrong, making things right, and ending product-sales goals for branch bankers so we can focus on your satisfaction."

"We're holding ourselves accountable to find and fix issues proactively, because earning back your trust is our greatest priority," the narrator says.

Sloan and other Wells Fargo executives are expected to elaborate on the bank's overhaul Thursday when they meet with institutional investors and analysts. A webcast of the conference will be available to the public.

But the campaign faces head winds, including that customers continue to read and hear about Wells Fargo's scandal.

For instance, the bank agreed Friday to pay $480 million to settle a class-action lawsuit filed by shareholders who accused Wells Fargo of securities fraud related to the scandal. Wells Fargo denied the allegations but said it settled to avoid the cost and disruption of further litigation.

And last month, federal regulators hit Wells Fargo with a $1-billion penalty for other abuses that harmed mortgage and auto-loan borrowers, one of the largest fines levied against a U.S. bank that was not related to the financial crisis.

The Federal Reserve even took the rare step in February of ordering the bank to cap its growth in assets at $1.95 trillion while it works to improve its corporate governance for what the Fed called "widespread consumer abuses and other compliance breakdowns."

Stephen Beck, founder of cg42, a management consulting firm that's researched the Wells Fargo scandal, said he doubts the campaign will be effective, noting the bank already had run ad campaigns aimed at repairing its image with customers before the latest enforcement actions.

"It's always easy to run an ad campaign," Beck said. "It's hard to change a culture, and consumers are smart enough to know that advertising is not to be trusted."

In the prior campaigns, Wells Fargo "trotted out the stagecoach just like they're trotting out the stagecoach here," Beck said. Now, the bank's posture is "let's say this time that we've learned and we're reestablishing," he said.

"The bottom line is that, when the fake-accounts scandal was going on, if you downloaded their mission, vision and values, they're not dramatically different than they are today," Beck said. "They were false and hollow then, and what's to make the consumer believe that these aren't false and hollow now?"

Gabor said she also thought Wells Fargo would have been better served by having Sloan in the commercial, noting other cases in which executives have made ads more effective. One example: Auto executive Lee Iacocca appeared in TV commercials in the 1980s that helped Chrysler rebound from near extinction.

"I was looking for someone from Wells Fargo, like a human being, to say, 'We accept responsibility, this is our plan, I personally own this plan and I'm going to hold myself responsible,' " Gabor said. "I might have liked to have seen Tim Sloan himself be part of the apology."

But others lauded Wells Fargo's campaign.

"I thought it was an artful, smart ad in that it acknowledges the scandal but very clearly talks about how they are doing things differently, of how the foundation of the company is and will be strong," said Michael Gordon, chief executive of Group Gordon, a corporate and crisis-communications firm.

Still, Gordon agreed that "an apology is only as good as the actions that follow. What's more important to the consumer is the action. They don't want to see the same mistakes repeated again."

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Source: LA Times.
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Old 06-12-2018, 02:30 PM
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Personally, I can't believe WF got into a situation like this that they have to apologize for. I laugh at these commercials and will never trust them again. To think that at one point, someone thought it was okay to create fake accounts and defraud people.

I just shake my head at these commercials and the Uber commercials with their new CEO. What has this world come to?
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Old 06-12-2018, 02:46 PM
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I just shake my head at these commercials and the Uber commercials with their new CEO. What has this world come to?
I get the point of the commercials. It is in the interest of transparency to say, "Hey, we know we screwed up and here's what we're doing to fix it." I respect that. But I agree that there's something wrong with a company that let those issues happen in the first place. Can a new CEO fix things? Maybe. I hope so. It's not so easy to change a really toxic corporate culture.
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Old 06-12-2018, 02:49 PM
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I don't know what I would have done if I had worked there and been asked to set up fake accounts. I would have had to quit (or been a whistleblower).
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Old 06-12-2018, 03:07 PM
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I don't know what I would have done if I had worked there and been asked to set up fake accounts. I would have had to quit (or been a whistleblower).
Go with whistleblower. You get 10% - 30% of any judgement if they are sued.

https://www.sec.gov/whistleblower
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Old 06-12-2018, 04:03 PM
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Well you could quit and still be a whistle blower, right?

Of course, most people can't quit until they have another job to go to.
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Old 06-12-2018, 04:18 PM
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I would get a new job and then blow them out of the water.
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Old 06-14-2018, 06:19 AM
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The one problem with that Wells Fargo ad is the line, "From day one, we always came through for our customers." Well clearly that isn't true or else this whole ad campaign wouldn't be necessary. It's happening because you totally screwed your customers and are now trying to clean up the mess and win back the public's trust.
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Old 06-14-2018, 06:56 AM
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I get the point of the commercials. It is in the interest of transparency to say, "Hey, we know we screwed up and here's what we're doing to fix it." I respect that. But I agree that there's something wrong with a company that let those issues happen in the first place. Can a new CEO fix things? Maybe. I hope so. It's not so easy to change a really toxic corporate culture.
I agree. At the very least, it is an attempt to own the problem.
Many companies would have just been quiet hoping the short attention span of consumers just forgot about the problem. Many people other then on this site that do not follow financial news probably already have forgotten.
BOA opened an account I knew nothing about until I ran my annual credit report getting rid of it was a nightmare, I had to threaten legal action.
I am sure all of us have gone into stores or other businesses that want people to sign up for "rewards" programs etc. The pressure put on employees is enormous not just bonuses or incentives but the threat of if you do not get x amount of sign-ups you will lose hours/ job. Many sign up people any way they can. These are things I have seen ...take info off a customers check/ used their own contact lists of friends or family, open up any "contest" sign up box and used entry forms to sign ppl up , whatever it takes.
Granted the pressure to open new accounts or quotas to push other accounts on customers was designed by corporate....BUT the actual DECISION to cross the line was PEOPLE chasing bonuses or saving their job. More then CEOs need replaced I would worry about the branch employees who opened the fake accounts. What happened to the employees???
Each account opened would have been tracked back to an employee who was getting the credit for the "new" account.

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Old 06-14-2018, 07:29 AM
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The pressure put on employees is enormous not just bonuses or incentives but the threat of if you do not get x amount of sign-ups you will lose hours/ job.
This is very true. I've heard so many stories over the years from people who were under enormous pressure at their jobs to upsell customers. Quite a few people left their jobs because of this. They just couldn't stand the constant pressure and threats to meet ridiculous quotas and they felt badly for what they were doing to the customers.
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Old 06-14-2018, 01:51 PM
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The one problem with that Wells Fargo ad is the line, "From day one, we always came through for our customers." Well clearly that isn't true or else this whole ad campaign wouldn't be necessary. It's happening because you totally screwed your customers and are now trying to clean up the mess and win back the public's trust.

That is my problem with it, too. If they were honest from the start and not trying to be crooks and defraud people, they wouldn't have to air this commercial. I don't think people should let them off the hook just because of the commercial.
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Old 06-14-2018, 05:50 PM
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The ad is a start. Taking responsibility is a step up from MANY companies these days.
My take is that while perhaps the upper executives pushed for increasing the volume of new accounts, but I sincerely doubt the upper corporate management said "take the info we already have without their knowledge and open unwanted accounts for our customers." That is the work of bank level managers/ employees.

I read an article today from the AP, in the course of this investigation the government found that 40 OTHER banks doing the same practice ( not in the same volume as Wells Fargo) but even 1 is too many in my opinion.
Wells Fargo is a safer bet to not happen again since they outed then the 40 banks that were not specifically named.
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