Wells Fargo admits computer glitch involved in foreclosures

Though a spokesperson wouldn’t say the glitch was a causal factor, the scandal gave plenty of ammunition to the bank’s critics. Will another apology cut it for the embattled company?

A crucial part of an effective PR apology is a change in behavior.

Words won’t suffice if an organization’s actions continue to do harm, and apologies lose their effectiveness over time.

Now Wells Fargo faces another scandal, and communicators for the besieged brand must dig deeper to provide a satisfactory mea culpa.

The latest round of bad news for the bank involves software that mistakenly denied customers loan adjustments on their mortgages, a computer glitch that may have cost people their homes.

CNN reported:

The embattled bank revealed the issue in a regulatory filing this week and said it has set aside $8 million to compensate customers affected by the glitch.

The same filing also disclosed that Wells Fargo (WFC) is facing “formal or informal inquiries or investigations” from unnamed government agencies over how the company purchased federal low-income housing tax credits. The document states the probes are linked to “the financing of low income housing developments,” but does not offer further details.

The error affected 650 loan applicants, 400 of whom lost their homes.

Wells Fargo addressed the mistake in a statement. CNN continued:

Wells Fargo said in a statement that it was “very sorry that this error occurred” and said it was “providing remediation” to the affected customers.

A spokesperson for the bank [said] “there’s not a clear, direct cause and effect relationship between the modification” denials and foreclosures, but confirmed customers who were denied modifications lost their homes.

The scandal is just the latest in a string of PR crises for the bank, which has been ordered to pay 2.1 billion in fines for issuing mortgage loans it knew contained faulty information. It’s also facing other SEC probes. In addition, the company paid penalties for creating millions of extra credit accounts without customers’ permission.

In this case, Wells Fargo has set aside 8 million dollars for affected customers.

On Twitter, users noted the frequency of Wells Fargo’s PR disasters:

Others found the word “glitch” too benign for the damage done to customers:

Others didn’t accept Wells Fargo’s story:

Still others called for the entire business to be shuttered:

Many tweets charged that the series of scandals has done serious damage to the bank’s reputation, with many calling Wells Fargo “corrupt”:

What do you think of Wells Fargo’s latest crisis, PR Daily readers? How would you advise the bank to start rebuilding its reputation?

(Image via)


PR Daily News Feed

Sign up to receive the latest articles from PR Daily directly in your inbox.