Wells Fargo defrauds customers

Wells Fargo Bank in September was embroiled in a firestorm of controversy after federal and local regulators slapped the San Francisco-headquartered institution with a massive enforcement action over “widespread unlawful sales practices.” As it turns out, thousands of the company’s employees nationwide had for years established millions of fake deposit and credit card accounts in customers’ names without their consent as a means of boosting employees’ sales figures, in many cases billing customers for financial services they never authorized.

Fines totaling more than $185 million were levied at the bank in September by the Consumer Financial Protection Bureau — the heftiest in that U.S. government agency’s history — as well as fines from the City Attorney of Los Angeles and the Office of the Comptroller of the Currency. Wells Fargo was also forced to pay full remediation to customers who incurred fees for financial products and services sold to them without their knowledge.

The CFPB cited Wells Fargo’s high-pressure sales culture, where branch employees were encouraged to cross-sell an array of financial products to customers, coupled with a lack of oversight, in setting the stage for the illicit activity. An internal review of five years’ worth of banking deposit accounts conducted by Wells Fargo resulted in the bank firing more than 5,000 employees as a result of its findings when the bank discovered more than 10,000 cases of customers being billed for services they never asked for, accounting for fees totaling more than $2.6 million.

After weeks-long cries for his ouster from the public, Wells Fargo Chairman and CEO John Stumpf — whose brutal verbal takedown before a Senate Banking Committee hearing became a YouTube favorite — in October announced his resignation from the company and board. He was succeeded by President and COO Timothy J. Sloan, an effete move seen as inadequate by many, as Wells Fargo essentially retains the same leadership — minus Stumpf — that took the bank down this path, to begin with.

Samsung’s brand goes up in flames

Samsung in August released its flagship Galaxy Note 7 smartphone to much fanfare, breaking the Seoul-based company’s pre-order records in many parts of the world. A scant few weeks later, however, reports began circulating that the hot smartphones were literally catching fire. Believing a manufacturing defect in the phone’s batteries was the culprit, the world’s largest mobile phone maker suspended Note 7 sales, announced a voluntary recall and said it would replace customers’ batteries.

Incidents of combustion continued with the replacement devices, however, and a month later the brand finally decided to recall all Galaxy Note 7s worldwide and permanently discontinue production. Samsung had thus far still been unclear communicating with the public whether the now-discontinued devices were safe to use or not, and as a result failed to manage its messaging and stay ahead of the crisis until it was too late. In the meantime, several countries banned the phone outright, and the Federal Aviation Administration had barred the Note 7 from being taken aboard any U.S. aircraft, a bad mark against a brand if there ever was one. The financial implications were even more stark: by 2016’s third quarter, Samsung’s earnings were down 33 percent from the quarter prior, with losses expected to be in the billions.

Samsung in November also announced that it was initiating a second recall, this time involving 2.8 million of its top-loading washing machines, some of which have reportedly exploded.

Tesla’s crash course in response messaging

Electric car maker Tesla Motors was poised to have a great year, having just unveiled its latest vehicle, the Model 3 sedan. Unfortunately, that announcement was quickly overshadowed by the news in June that Tesla driver Joshua Brown had been killed a month earlier in Florida, when his Tesla Model S collided on a public highway with a tractor-trailer while Brown was allegedly using the car’s much-heralded autopilot technology.

In the aftermath of the accident — which prompted an investigation by the National Highway Traffic Safety Administration — Tesla Motors boss Elon Musk did what many senior executives do in times of crisis: he turned to the Internet. Unfortunately, his words weren’t exactly ameliorative. Called by some a “case study in how not to handle a crisis,” the South African-born business magnate, who was the visionary behind PayPal and aerospace manufacturer SpaceX, penned a eulogy for Brown that read more like a rant and spent more time defending the company than memorializing the employee who’d died. Noting that Brown’s death was the first in the company’s 130 million testing miles, Musk later tweeted that: “1.3 million people die a year in car accidents. Yet, 1 person dies in a Tesla on autopilot and people decry driverless cars as unsafe.” Musk’s public reaction had the unintended consequence of trivializing an employee’s death and making the incident all about his company as if that’s any way to save a brand’s reputation.

It wasn’t until September when Musk rolled back some of his comments and noted that improvements in Tesla’s autopilot technology likely would have prevented the fatal crash in Florida. Meanwhile, it was reported that Tesla was being investigated by the U.S. Securities and Exchange Commission regarding whether the company failed to disclose the crash to investors in a formal regulatory filing, with Fortune reporting that Tesla had sold more than $2 billion worth of new shares to investors before news of the accident had been announced.

Musk again took to the Internet to air his grievances regarding the report, writing, “please, take 5 mins and do the bloody math before you write an article that misleads the public,” thus proving the adage that old habits die hard, even online.

Microsoft’s hate-mongering Twitter bot

The technology and research teams at Microsoft, working in conjunction with its Bing team, in March debuted AI chatbot Tay, the tech giant’s latest innovation that focused on how technology can better understand human speech.

Billed as “the AI with zero chill,” Tay was outfitted with a Twitter account and programmed to interact with other users on the microblogging site, mimicking words and language patterns. The bot was designed to improve its communication skills as its interactions grow, ideally becoming more natural sounding over time and better equipped to understand conversational language.

It took less than 24 hours for society to corrupt the bot, as Tay quickly became the Internet’s id and soon began issuing a series of racist and sexist tweets, with memorable quotables such as “Bush did 9/11 and Hitler would have done a better job than the monkey we have now.”

Microsoft quickly found itself deleting some of Tay’s more inflammatory tweets, claiming in a March 25 statement that the bot had been the victim of a “coordinated attack by a subset of people” that “exploited a vulnerability in Tay.” Microsoft then suspended Tay’s Twitter account for adjustments before taking it offline entirely several days later. The company has since stated that it plans to resurrect Tay “once it can make the bot safe,” underscoring a challenge not only for the future of AI but for humanity as well.

Mylan gouges customers

Pharmaceutical company Mylan, which sells popular emergency allergy treatment EpiPen, has maintained a virtual grip on the epinephrine autoinjector market for a decade, accounting for about 90 percent of the devices sold ever since it acquired the right to market and distribute the life-saving products from Merck.

EpiPen sales in 2015 accounted for $1.5 billion, about 40 percent of Mylan’s profits, and since 2009 the company has continually raised the price of the devices. When the price of a two-pack of EpiPens skyrocketed this year by nearly $150 without warning — accounting for an overall increase of 400 percent in the past 10 years — the outrage was palpable, especially considering the product’s primary users are children.

Headlines were rife with accusations of price gouging, and Mylan’s stocks — and reputation — plummeted precipitously as a result. To make matters worse, media outlets began reporting that Mylan CEO Heather Bresch had given herself a multimillion dollar raise the year prior.

The company was quick to respond, with Bresch hitting the TV circuit in an apology tour of celebrity proportions. Mylan attempted amends by introducing a less-expensive but identical generic autoinjector product, and when this didn’t seem to move the needle, the company in August said it would double the eligibility for its patient assistance program and reduce out-of-pocket patient costs by 50 percent for the EpiPen through the use of a savings card.

The PR salvo didn’t put an end to Mylan’s problems. Aside from a lingering deficit of consumer trust, the U.S. Department of Justice opened an investigation into whether the company had committed fraud by misclassifying the EpiPen under the Medicaid Drug Rebate Program. This ultimately resulted in the company agreeing to a $465 million settlement in October. Then, in December, attorneys general in 20 states filed a civil complaint accusing Mylan — along with a half-dozen other pharmaceutical companies — of engaging in a price-fixing scheme to keep drug prices high.

Theranos draws bad blood with regulators

Blood-testing company Theranos is best known for its innovative fingerstick technology, which draws a pinprick sample of blood from a patient’s hand at a fraction of the cost — and pain — of traditional diagnostics tests.

When the Wall Street Journal last year kicked off an extensive investigation that questioned the accuracy of its technology, however, the Palo Alto-based company became the subject of probes from federal regulators.

The Centers for Medicare and Medicaid Services levied a series of harsh sanctions against the start-up, revoking Theranos’ CLIA certificate and prohibiting its owners from operating a lab for two years. In its findings, the CMS concluded that Theranos’ blood tests “pose immediate jeopardy to patient health and safety.”

The embattled health tech company in October announced it would close its lab operations, lay off 350 employees — about 40 percent of its workforce — and shift its focus to the creation of miniature medical testing devices. Then, in November, Theranos pharmacy partner Walgreens filed suit against the company in a federal court for breach of contract, allegations which Theranos has disputed. The diagnostics company is also now under investigation by the Securities and Exchange Commission for allegedly misleading investors and government officials about its technology.

Ikea issues delayed recall

In February 2014, a two-year-old boy from West Chester, PA died after a six-drawer Ikea Malm chest tipped over and pinned him against a bed. Four months later, a three-drawer version of the same chest was responsible for killing another two-year-old boy in Snohomish, WA.

Terrible as the news was, the deaths prompted the Swedish furniture giant to issue little more than a mere warning, informing the public that a line of its chests and dressers weren’t stable if left unanchored to a wall. The company also offered free wall-mounting kits to customers that requested them. Both announcements went notably unpublicized.

Then came the news that more than a dozen additional tip-over incidents had occurred, including a 2016 incident in which a two-year-old boy from Apple Valley, MN died after a Malm's chest fell on top of him (it has since been reported that a fourth child was killed by a falling Malm dresser in 2011).

Like Samsung, it wasn’t until this late development that Ikea finally shifted into crisis mode, and in June announced that it was recalling 29 million chests and dressers, and said it would give full refunds to customers that purchased the Malm between 2002 and 2016 (the company also set up a program where Ikea would pick up the dressers from customers’ homes). The 2016 recall announcement resulted in massive media coverage. Arguably, it’s what the multinational retailer should have done several years ago.

In December it was announced that Ikea has reached a $50 million settlement with the families of three of the toddlers who died in the tip-over incidents.

The not-so Democratic National Committee

Democracy, as it turns out, isn’t the Democratic National Committee’s strong suit. After a primary/caucus cycle that highlighted horrible inefficiencies, leaked emails later revealed outright corruption in the DNC’s ranks, where party members colluded to push its preferred "brand," Hillary Clinton, through the delegate selection process to become the party’s choice over Bernie Sanders.

Perhaps it’s an unpopular opinion, but it’s also the truth: Clinton is a terrible brand with far too much baggage, and throughout the election, she was always just one crisis away from implosion. She was so bad, in fact, that Donald Trump managed to beat her. The Russians weren’t responsible for the fact that Clinton received six million fewer votes than Obama in 2012. FBI Director James Comey isn’t to blame for the fact that Clinton barely campaigned in Democratic strongholds like Wisconsin, costing her crucial Rustbelt votes that have gone blue without fail for the last three decades. Julian Assange isn’t the reason Clinton didn’t follow the proper procedure for setting up her email account when she was secretary of state.

If Democrats want to win another election, maybe pick a candidate next time who isn’t wildly unpopular and seen by an overwhelming number of Americans as dishonest and untrustworthy. Maybe pick a candidate next time who isn’t under investigation by the FBI. Maybe pick a candidate that people are genuinely excited about, someone who actually promises something aside from being an alternative to the other candidate. Maybe listen to your party’s members for once. With Clinton, the DNC made the classic PR mistake of overpromising and under-delivering. Now the rest of us have four years to mull over that decision.