Wells Fargo & Co looks to emerge from scandal

Wells Fargo & Co (ticker: WFC) is spearheading two efforts in the wake of the bank and credit card fraud scandal that roiled the company in 2016: a new branch worker compensation plan and debit card-free ATMs.

The company wants to bolster its reputation after it created millions of fake bank and credit card accounts, resulting in a large scandal for an otherwise well-regarded company and $185 million in fines. It also led to CEO John Stumpf's resignation last October.

SEE ALSO: What percent of Wells Fargo customers are closing their accounts?

An internal document provided to Reuters says the new plan will feature customer service incentives instead of sales goals, in addition to more sales activity vigilance.

"This new plan is one step in our efforts to restore trust with team members and customers, and we will continue to make additional changes," Mary Eshet, a bank spokeswoman, told Reuters in an e-mail.

As for the ATM process, consumers would access the Wells Fargo app on their phone and ask for an eight-digit access code, reports CNN Money. They would then provide this code, plus the standard ATM code, at a typical kiosk to unlock their funds. The company, which has 13,000 ATMS, anticipates it will be the first bank to update all its ATMs to this format.

According to CNN Money, JPMorgan Chase & Co. (JPM) is piloting a card-free choice in several states, while Bank of America Corp. (BAC) gives consumers the options at half of its ATMs and is looking to shift them all this way.

But is this way necessarily easier for consumers? Wes Dunn, senior vice president of sales for ATM manufacturer Genmega, told CNN Money, "Getting out a piece of plastic and inserting it is not so terribly difficult, so outside of being trendy and cool, I fail to see the benefit to the cardholder themselves."

RELATED: Wells Fargo's CEO and other executives who got the golden ax

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Wells Fargo's CEO and other executives who got the golden ax
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Wells Fargo's CEO and other executives who got the golden ax

Roger Ailes, $40 million

POSITION: Chairman, Fox News

WHAT: Sexual harassment claims and a lawsuit alleged that Ailes demoted and fired female anchors and other employees who rejected his overtures.

WHERE ARE THEY NOW: Ailes has been advising Donald Trump's presidential campaign.

Image: REUTERS/Fred Prouser/File Photo

Jeff Smisek, $29 million

POSITION: CEO, United Airlines

WHAT: A federal investigation found the airline had added back a money-losing flight between Newark and Columbia, South Carolina. An official with Port Authority, which oversees Newark airport, happened to own a weekend house near Columbia, and had whinged about the flight being dropped.

WHERE ARE THEY NOW: Smisek's initially reported severance of $8.4 million was later found out to be $20 million higher, on the condition that he cooperated with investigators following his resignation.

Image: REUTERS/Shannon Stapleton

Robert Willumstad, turned down $22 million

POSITION: CEO, AIG

WHAT: His firm sold financial instruments that underpinned the mortgage bubble and was bailed out by the government in the 2008 crash. In a marked contrast to other ousted execs, Willumstad wrote in a letter to his successor, "I prefer not to receive severance payments while shareholders and employees have lost considerable value in their AIG shares."

WHERE ARE THEY NOW: Willumstad is an adviser to a private equity firm he founded in 2007, and chairman of the board of trustees of Adelphi University, which named its business school after him, following his $9.5 million donation. 

Image: Andrew Harrer/Bloomberg via Getty Images

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Copyright 2016 U.S. News & World Report


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