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Opinion: At what point is a company’s behavior inexcusable?

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It seems pretty straightforward. If a corporation commits a heinous act, stop doing business with said company.

But that does not seem to hold true in the real world.

BP PLC (NYSE: BP), for example, is still very much a multibillion-dollar force despite deserved penalties and struggles after accidentally dumping millions of barrels of oil into the Gulf of Mexico.

The world moves on, people forget and corporations continue to earn profits despite egregious conduct.

Wells Fargo & Co. (NYSE: WFC) is another company begging the question: At what point is a company’s behavior inexcusable?

One would think, after Wells Fargo was involved in the creation of millions of fraudulent accounts in its clients’ names without telling them, that customers would take their money elsewhere.

Wells Fargo was not left unharmed by the scandal, brought on in 2016 by federal government allegations that employees at the banking company created fake accounts to meet sales quotas. The company has since paid fines, penalties and settlements, and it agreed to shut down its illegal sales practices.

But this hasn’t stopped customers from continuing to do business with the company.

Last month, Wells Fargo reported second-quarter earnings of $5.2 billion, down from $5.9 billion a year earlier, on revenue of $21.6 billion, which dropped from $22.2 billion a year prior. The results were worse, but we’re talking small portions of billions of dollars.

Another large red flag came this month, when Wells Fargo disclosed in a regulatory filing that a software glitch led to nearly 400 of its customers losing their homes between 2010 and 2015.

Company officials have apologized and set aside funding to provide remediation to affected customers, but that simply isn’t enough. Consider having lost your home due to forces beyond your control. What’s worse, think about learning it was all due to an error on behalf of Wells Fargo, which should have myriad of checks and controls to stop this kind of thing from happening. But happen it did. 

Ultimately, customers decide when the last straw falls. Currently, one out of every three U.S. households is a customer of Wells Fargo, according to its earnings news release. We’ll see if that holds up, especially if more offenses against customers hit the news.

That brings up another company, Facebook Inc. (Nasdaq: FB), which has appeared in recent news articles alongside the banking company.

Facebook, according to The Wall Street Journal, has held meetings with large U.S. banks, including Wells Fargo, asking them to share financial information about their customers, including card transactions and checking-account balances. The story indicated Facebook intends to use the information to offer new services to users.

Talk about invasion of privacy.

Combined with the recent data scandal involving Cambridge Analytica, this type of news should prompt a mass exodus from the social media platform.

Will it? Again, time will tell, but it’s unlikely. In its second-quarter earnings report, Facebook reported an 11 percent increase in daily active users to 1.5 billion on average and an 11 percent jump in monthly active users to 2.2 billion compared with the same period a year earlier. That’s one in five people on the face of the planet using Facebook daily.

I’m personally guilty of continuing to use Facebook, mostly to keep up with family. But that’s starting to sound like self-deception, a convenient lie I tell myself to keep feeding my personal social media addiction.

A viable Facebook alternative may be what we need. Facebook officials really would listen if their advertisers switched platforms.

The same is true of any company. Hit them where it hurts – the bottom line – if customer offenses occur.

To stop questionable, and sometimes criminal, behavior by corporations, customers must vote with their wallets.

Web Producer Geoff Pickle can be reached at gpickle@sbj.net.

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