We talked last week about the characteristic reactions to corporate scandal – rapid and remedial. The bad news for Wells Fargo is that the magnitude of the scandal keeps growing. The company recently divulged a 67% increase in the “potentially unauthorized customer accounts” – that is, those accounts that were opened using customers’ names but without their permission – to 3.5 million unauthorized accounts, from the originally announced 2.1 million. Apologies have been offered as well as an additional $3.7 million in customer refunds. As well, regulatory investigations are likely to continue.
Exquifax’s serious dilemma represents the second-largest hacking loss of customers’ confidential information (roughly 143 million accounts, as opposed to Yahoo’s 1.5 billion last year), coupled with the highly-questionable practice of directors’ selling off stock ($1 million in one instance) before the breach was announced to the public. Since Exquifax is in the business of securing and protecting confidential customer information, it will be interesting to follow ongoing developments of this situation.