Following public revelations of pressures on bank staff to set up fraudulent accounts in order to reach sales quotas, the CEO of Wells Fargo Bank was forced to apologize to and recompense customers for whom the bank had set up false credit card and auto loan accounts. As a consequence, over 100,000 account managers were terminated, a $186 million fine was paid to the U.S. government, the CEO was forced to resign, and the company's stock price also sharply declined. Which of the following costs did Wells Fargo incur?

Question

Quizplus · Accepted Answer

Wells Fargo incurred internal administrative costs, tangible costs (e.g. the $186 million fine paid to the U.S. government), and intangible costs (e.g. damage to the company's reputation and decreased stock value). The termination of over 100,000 account managers would also incur additional tangible costs such as severance pay and hiring and training of new staff. Therefore, choice C is the best option.

Following Public Revelations of Pressures on Bank Staff to Set