Case1: Wells Fargo

Adapted from "5,300 Wells Fargo employees fired over 2 million phony accounts", CNN Money, 9 September, 2016 (http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html?iid=EL)

Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for. That's exactly what happened to Wells Fargo customers nationwide.

On Thursday, federal regulators said Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts -- without their customers knowing it -- since 2011. The phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.

"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the shady behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said. The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.

The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent, regulators say. The CFPB described this practice as "widespread." Customers were being charged for insufficient funds or overdraft fees -- because there wasn't enough money in their original accounts.

Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers' knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.

The CFPB said Wells Fargo will pay "full restitutions to all victims." Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.

"We regret and take responsibility for any instances where customers may have received a product that they did not request," Wells Fargo said in a statement. Wells Fargo confirmed to CNN Money that the 5,300 firings took place over several years. The bank listed 265,000 employees as of the end of 2015. "At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action," the bank said in a memo to employees on Thursday.

As part of the settlement, Wells Fargo needs to make changes to its sales practices and internal oversight.

Customers are fuming. Brian Kennedy, a Maryland retiree, told CNN Money he detected an unauthorized Wells Fargo account had been created in his name about a year ago. He asked Wells Fargo about it and the bank closed it, he said. "I didn't sign up for any bloody checking account," Kennedy, who is 57 years old, told CNN Money. "They lost me as a banking customer and I have warned family and friends."

"Consumers must be able to trust their banks," said Mike Feuer, the Los Angeles City Attorney who joined the settlement.

(a) Explain how the issues raised in this media report are ethical issues.

(b) Explain how the following may have had an impact on individuals working atWells Fargo:

i. organisational norms

ii. conformity and groupthink

Case 2: The National Lottery

Adapted from www.the-national-lottery.co.uk "Where the money goes" (https://www.national-lottery.co.uk/life-changing/where-the-money-goes, Accessed February 21, 2017) and www.lottoland.co.uk "The people behind the lottery" (https://www.lottoland.co.uk/magazine/lottery-demographics.html, Accessed February 21, 2017)

You have supported 500,000 amazing projects!

Making sure as much money as possible goes towards life-changing projects is incredibly important to us. In fact, it's what we're here for. For every ticket sold, a hefty slice of the money received goes to a huge variety of projects, both big and small - from repairing Scout huts to making Olympic and Paralympic champions. So, every time you play, the UK wins.

Less than 1% of our total revenue is kept as profit after tax and just 4% goes on operating costs. It's how we're able to raise, on average, over £30 million a week for National Lottery projects. So far, that's amounted to a whopping £36 billion spread across 500,000 projects - averaging 160 for every UK neighbourhood.

As has always been the case, the total amount delivered to these projects depends on a number of variable factors. These include the mix of games sold, whether they're bought in a shop or online, and the level of unclaimed prizes. A year in numbers:

From total ticket sales of £7,595 million in the year ending 31 March 2016:

• £1,901 million was raised for National Lottery projects
• £4,198 million was paid to players in prizes
• £911 million went to the Government in Lottery Duty
• £333 million was earned by retailers in commission

Decisions on how and where funding is invested are made by 12 specialist organisations. These are chosen by Parliament for their knowledge and expertise to help ensure the money goes exactly where it's needed. In the year ending 31 March 2016, the funds were shared as follows:

• Health, education, environment and charitable causes - 40%
• Sport - 20%
• Arts - 20%
• Heritage - 20%

...

It turns out a staggering 70% of the UK's over 18s take part in the national lottery on a regular basis, which is close to 45 million people. On top of that at least 50% of the overall population do more than once a month, and on average they buy a minimum of 3 tickets each week. 

The demographic of lottery participants is far broader than one might expect. For starters it is an even split between men and women, at least in the United Kingdom.

Of 18 to 25 year olds, roughly one sixth of this age range does the lottery at least once a month. Between the ages of 25 and 34 around one third buy a ticket, while half of over 35s partake in a lottery draw at some point during any given month.

Studies have shown that if you are upper and middle class, you are less likely to partake in a lotto draw than someone who is working class. And finally... people on benefits are 4% more likely to buy a ticket than those who are not.

Is the UK's national lottery unjust?

Explain howeach of the following theories could be applied to answer this question:

(a) Rawls' theory of justice

(b) Nozick's theory of justice

Attachment:- Assignment Files.rar