Wells Fargo’s Big Crack-up


The stage coach lands in the ditch. It’s nuts, the sheer scale of this story: Since 2011, Wells Fargo employees created 1.5 million bogus bank accounts and another half a million fake credit card accounts to meet sales quotas and earn incentives (The Wall Street Journal). They signed people up for these accounts, and even moved money into them, without customers’ knowledge or consent. As these practices began to be investigated by Los Angeles prosecutors and federal regulators, the bank ended up firing 5300 employees, or about one percent of its workforce. Wells Fargo was one of the few big U.S. banks to get through the big bank bust of 2007–8 relatively unscathed; now it has been fined $185 million by the Consumer Financial Protection Bureau (the watchdog agency set up after that banking collapse). Remember how hard some defenders of the banks fought to keep the CFPB from being established? Banks, they said, could regulate themselves. If that card ever worked, it just expired. Banking (and all business) depends on trust; the more stories like this people hear, the faster they will flee big old institutions and seek new alternatives.

Facebook plays the censor. If you were looking for a test case illustrating exactly why people argue with Facebook when it says things like “we are not a media company,” you couldn’t invent a better one: After someone posted Nick Ut’s famous Vietnam War photo of an anguished young girl running down the street after a napalm attack, Facebook took it down (The Guardian). The company told him to “remove or pixelize” it (the girl is naked). When he refused — he’d included it in a gallery of images that had “changed the history of warfare” — Facebook suspended him. In protest, many others reshared the image — among them, Norway’s prime minister. Her post was deleted, too. You can expect more follow-ups, reversals, and contorted press releases as Facebook tries to extricate itself from the mess it has stepped into. Policing online content boundaries is a challenging business, and the bigger you get, the harder it becomes. Facebook still has a lot of learning to do.

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