Buzz
While smaller businesses might immediately raise suspicions of scams or unethical practices, it's often the large corporations that get away with these schemes behind the scenes. Even well-established companies have been caught in dishonest acts. However, as seen in the following examples, the outcomes vary dramatically.
10. Wells Fargo's Fake Accounts Scandal
In 2016, multiple Wells Fargo customers reported mysterious bank fees. When regulators launched an investigation, they uncovered a startling revelation: over two million unauthorized accounts were created without the customers' knowledge.
These accounts were created without the customers' knowledge and subjected to the same fees as standard accounts. Many of these unauthorized accounts were secretly opened by employees to inflate their sales numbers and earn bonuses.
The accounts date back several years, with the first being opened in 2011. In addition, many Wells Fargo employees signed customers up for credit cards, racking up $400,000 in fees from 14,000 cards. As a result, Wells Fargo faced hefty fines and was required to fully compensate the affected customers. The company also fired 5,300 employees involved in the scheme.
9. SeaWorld's Deceptive 'Poll'
In 2013, CNN aired a shocking documentary titled Blackfish, which exposed the mistreatment of orcas at the renowned SeaWorld theme park. The film highlighted the tragic 2010 incident in which a trainer was killed by one of the orcas, which had previously been connected to two other human fatalities.
This documentary sparked intense criticism. However, when the Orlando Business Journal surveyed its readers, an overwhelming number claimed the documentary had not influenced their views on the park.
When a reporter investigated the poll results, a shocking discovery was made: Many votes came from the same IP address, which was traced back to seaworld.com. Despite the park denying the use of “bots” to manipulate the poll, a second poll conducted without SeaWorld's involvement revealed that the majority of respondents were now opposed to the park.
8. Enron's Power Outages Scandal
Following Enron's dramatic collapse in the early 2000s, a series of its illegal activities were exposed, each one more shocking than the previous. From 2000 to 2001, California faced a devastating energy crisis, marked by frequent rolling blackouts. Enron controlled a significant portion of the state's energy supply, having pushed for deregulation in the late 1990s.
In 2005, tapes of several meetings surfaced, revealing that Enron had manufactured the energy crisis in order to inflate prices, costing California residents close to $1.6 billion. This financial boost caused Enron's stock price to surge. However, the company could not withstand its own deceit and ultimately declared bankruptcy.
The energy crisis reached such a critical point that it led to the removal of Governor Gray Davis, who was blamed for the skyrocketing energy prices.
7. Bank Of America’s Credit Card Scandal
In 2014, Bank of America was mandated to pay nearly $800 million in refunds and fines due to illegal credit card practices. The bank had charged customers for fees that were completely unlawful. For example, telemarketers falsely told customers that the first 30 days of specific products were free, while in reality, they were being charged right from the start.
The bank also deceived customers by claiming they were merely receiving details about additional services, but in truth, they were being signed up for and billed for those services, many of which were unnecessary.
These deceptive practices took place between 2000 and 2011, affecting around 1.9 million customers. In several instances, these extra charges pushed customers over their credit limits, leading to further fees.
Even before the 2014 settlement, Bank of America had agreed to refund money to most of its customers who had complained about these excessive charges.
6. ExxonMobil and Climate Change
Whenever climate change is discussed, fossil fuel companies often find themselves in the hot seat. While it’s widely understood that mining coal or drilling for oil disrupts the environment, ExxonMobil has maintained that these activities are not responsible for climate change.
As early as the 1970s, experts warned ExxonMobil that climate change would have a significant impact on the oil industry. Despite these early warnings, ExxonMobil persisted in denying climate change to both its investors and the public.
In 2008, ExxonMobil invested $30 million into a campaign designed to cast doubt on the reality of climate change. The company also worked to suppress important scientific research regarding the environmental damage caused by fossil fuel extraction. These discoveries only came to light recently, and legal proceedings are still underway.
5. Ocwen’s Subprime Mortgages
Ocwen Financial Corporation, a company responsible for collecting mortgage payments, claims to assist homeowners in managing their payments. However, federal investigations revealed that Ocwen engaged in deceptive practices, such as backdating letters to create the illusion that homeowners were late on their mortgage payments.
Based on these misleading letters, the company imposed hefty fees. When homeowners were unable to keep up with the mounting costs and additional payments, Ocwen proceeded to foreclose on their properties. Nearly 185,000 homeowners were victims of foreclosure due to the backdated letters.
In 2011, the Federal Trade Commission (FTC) transferred the lawsuits against Ocwen to the newly established Consumer Financial Protection Bureau (CFPB). After conducting investigations and filing lawsuits, the CFPB issued a ruling in 2013 requiring Ocwen to pay a $2.1 billion settlement and $125 million to homeowners who were unlawfully forced into foreclosure.
4. Volkswagen’s Emissions Fraud
In September 2015, the US Environmental Protection Agency (EPA) identified discrepancies in the emissions of various Volkswagen vehicles. The company had executed what became known as a “diesel dupe.” They installed software that could detect when the vehicles were being tested, causing the emissions results to appear better under test conditions. However, on the road, many of these cars emitted nitrogen oxides up to 40 times the legal limit.
At the time, Volkswagen was promoting diesel cars worldwide, emphasizing their low emissions as a major selling point. However, the EPA discovered that 482,000 Volkswagen vehicles in the US were equipped with the diesel dupe software. The company later admitted that this software was installed in 11 million vehicles globally.
After being exposed, Volkswagen agreed to pay nearly $15 billion to settle the scandal. Additionally, the company was required to either buy back or fix every affected vehicle by 2018.
3. Signet Jewelers’ Financing And ‘Diamond Swapping’
In 2016, Buzzfeed published a shocking article about Kay Jewelers, featuring accounts from women across the US who claimed that their diamond rings were returned with substandard diamonds after repairs. In some instances, the women did not get back their original diamonds, but instead received a much cheaper man-made alternative called moissanite.
Following the release of the report, sales at Signet Jewelers Limited, the parent company of Kay Jewelers, plummeted by 20 percent. CEO Mark Light attempted to suppress further reports of diamond swapping and offered sales promotions to stimulate business. Soon after, another report surfaced concerning Signet's accounting practices related to their credit financing.
Through clever accounting tactics, it is believed that the company tried to conceal delinquent payments and losses from customers. In a bid to increase sales, the company aggressively marketed financing plans to customers and potential buyers who were not fully aware of the terms.
Amidst all the negative publicity, the company’s stock took a significant hit. CEO Light attributed the drop to a “targeted attack” by short sellers.
2. Walmart’s Mexican Bribes
In 2005, Walmart's top executives discovered that Walmart de Mexico was involved in a massive corruption scheme. While Mexico is already notorious for corruption, the Walmart de Mexico bribery scandal was one of the most extensive.
It all began with an email from a former executive, revealing that leaders at Walmart's Mexican subsidiary had bribed officials across the country, amounting to $24 million in total. As an independent subsidiary, Walmart de Mexico kept the bribery hidden from the parent corporation. Executives there even took measures to conceal their actions from the US-based leadership.
In response, Walmart suspended all operations in Mexico. However, no one faced punishment, and the bribes were not made public until 2012, when The New York Times exposed the scandal. By 2016, Walmart successfully had the case dismissed from the courts.
1. Best Buy’s Fake Website
In May 2007, the Connecticut Attorney General's office filed a lawsuit against Best Buy after numerous customers reported price discrepancies between Best Buy's online prices and those in its physical stores. After being informed of the issue, Best Buy assured the public that the problem was resolved. However, customers continued to report the same discrepancies.
Shoppers would find a lower price for an item online, only to discover that the in-store prices were significantly higher when viewed on the in-store kiosk. In reality, there were two separate websites that looked nearly identical, designed to deceive customers into paying more for the same items.
A company representative eventually addressed the situation, stating: 'Bestbuy.com is the national price. Individual store prices may vary from market to market.'
+Further Reading
It's often difficult to find reasons to appreciate massive multinational corporations, as this list clearly shows. As a result, they frequently become the subject of top 10 lists! Here are a few more from our archives:
10 Shocking Acts of Cruelty By Well-Loved Brands 10 Unethical Corporations You Support Every Day 10 Outrageous Ways Companies Exploited Incompetence And Violence For Profit 10 Common Products Made With Forced Labor
