Wells Fargo Redux:How long is the long tail of scandal? For Wells Fargo it’s at least one year. You’ll no doubt recall the bogus credit card scandal that the bank found itself engulfed in during late August and early September 2016. Has it atoned for its misdoings? Well, it forked over a record $185 million in fines to settle three federal lawsuits in September 2016 as well as the head of its then-CEO John Stumpf, who reluctantly resigned after repeatedly stumbling in front of congressional committees and, prior to that, failing to admit there was much wrong at Wells Fargo, despite firing 5,300 workers over the sham accounts. Yet since the scandal broke and eventually fell off the front pages, stories have surfaced about additional improprieties at the bank. Not more than a few weeks after the scandal broke, stories arose about Wells Fargo forcing wronged customers into arbitration instead of permitting court cases to be heard. There was a spate of mortgage stories, the most recent coming last month when a Nevada plaintiff accused the bank of improperly handling interest-rate locks. The bank also admitted more than 500,000 cases of customers unknowingly enrolled in its online bill payment plan. The crescendo on Capitol Hill rose to a shout during the last week of August 2017, though, when the bank unveiled that its estimate of 2.1 million bogus accounts was off…by more than 1 million accounts. The number of phony accounts now stands at 3.5 million, off 70% from the bank’s initial estimate. End result: Wells officials will be back on Capitol Hill this week defending themselves against charges that Stumpf misled lawmakers one year ago. Stumpf’s successor, Tim Sloan, faces the Senate Banking Committee at our press time. His prepared remarks contrast with Stumpf’s previous Hill appearance. “I am deeply sorry,” Sloan will say.
CEO, Equifax
Misery Loves… Wells Fargo won’t be the only brand playing defense on the Hill this week because of inept crisis management. Equifax, which must have gotten hold of Wells’ crisis playbook, will also be making a congressional visit. No need to replay details of its crisis miscues. Katie Paine does it well in her Image Patrol on page 1 of this edition. (The only detail Paine missed occurred near press time: Similar to Wells Fargo, Equifax missed on its estimate of victims, saying late Sept. 2 that its data breach touched 2.5 million more people than initially estimated, bringing the total to 145.5 million.) Hopefully Equifax takes note of Wells’ continual misery and for starters opts to be transparent and remorseful. At least its former CEO, Richard Smith, departed quicker than Stumpf did and apologized sooner. Smith, who received an estimated $90 million departure package, is set to appear this week in front of House and Senate committees. Beyond Smith’s contrition and the ouster of its CIO and chief security officer, though, Equifax at minimum needs to make preparations for a future crisis. It should develop a crisis communications plan, designate an official spokesperson and make plans for an online resource center. Although Washington is gorgeous this time of year, one of Equifax’s goals should be to avoid needing to book a trip here in September 2018.
CEO to the Rescue: Last week we complimented new Uber CEO Dara Khosrowshahi’s good PR move, admitting the brand had “got things wrong” and apologizing to the government and people of London. That earned Uber a meeting with officials of London’s TfL, the unit responsible for not renewing Uber’s license. In a show of leadership, Khosrowshahi, at our press time, was said to be in London, taking the meeting. Uber is a three-ring circus, though. So as the TfL meeting was occurring in the center ring, ousted Uber boss/cofounder and board member Travis Kalanick was performing in one of the side rings. Kalanick, who retains a board seat, issued a statement saying he’d recruited Ursula Burns, the former Xerox CEO, and erstwhile Merrill Lynch boss John Thain to the Uber board. In a statement, Uber said the appointments were a “complete surprise.” In other Uber news, the brand’s northern Europe boss, who oversaw London, said Oct. 2 she’s departing. Jo Bertram insists she had decided to leave Uber well before the London situation arose.
Growth: Congrats to former Hotwire exec Rebecca Honeyman and Greg Mondshein, who’ve opened SourceCode Communications in NY, catering to tech businesses.
People: A huge congrats to our friend and PR News Hall of Famer Southwest Airlines VP and CCO Linda Rutherford, promoted to SVP and CCO. – The American Physical Therapy Association named Capitol Hill vet Katherine Beh Neas EVP, public affairs. – Hotwire upped Christa Conte to SVP/head of its NY office; and Laura Macdonald to SVP/head of consumer, U.S. – Dawn Bridgeswas named EVP, communications, Fusion Media Group.