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The 4 Scariest Customer Service Scandals of 2017

There are three words that haunt the nightmares of every company executive: customer service scandal. Now we’re not talking about a small mishap followed by a genuine apology, these are scandal’s that will send a shiver down your spine. And as they should! U.S. companies alone lose an estimated $62 billion dollars a year to bad customer experiences. These widespread scandals can serve as a lesson to all companies what is really at stake when you aren’t treating your customers right.

4. American Airlines

On April 22nd of this year, video surfaced that shows the aftermath of a disturbing encounter between an airline worker and a passenger. Witnesses say that after a woman refused to remove her stroller from a plane, so a flight attendant violently took it from her, the stroller hitting her and almost her baby in the process. The video shows the woman crying, and another passenger getting into an altercation with said flight attendant while standing up for her, to which the flight attendant responds “Come on. Hit me. Come on. Bring it.”

Airlines have become notorious for their questionable customer interactions lately (just see #2 on our list) but endangering a baby is a whole other level of wrong. American Airlines promptly fired the employee in question, and issued an apology saying that "What we see on this video does not reflect our values or how we care for our customers.", but that didn’t keep their stocks from plummeting 8% in only one day following the incident. Yikes.

3. Wells Fargo

Wells Fargo has been suffering blunder after blunder. They mistakenly charged 800,000 customers for car insurance loans that they no longer needed. Then came the announcement of the multitude of fraudulent accounts, first reported as 2.4 million accounts, now that number has soared to 3.5 million fraudulent accounts made for clients without their consent.

The blame for why this was happening was shifted several times, from frontline employees to bank managers, but in the end it was discovered that this happened because of pressure from the top level to open as many accounts as possible. And Wells Fargo is paying the price—literally. Not only were they mandated to pay a $185 million dollar fine due to this less than legal activity, but customers have been fleeing in mass. That’s what happens when you lose your customer’s trust.

2. United Airlines

United Airlines shocked the world in April when several passenger’s videos were released to the public of a man being physically dragged off of one of their flights. These are hard to watch, as they depict a 69 year old man, bloody and disoriented, being dragged by his arms down the aisle. The encounter left him with a concussion, a broken nose, and the loss of two teeth.

This all happened because United is legally allowed to “overbook” its flights, basically selling more tickets than they had seats. They attempted to offer a monetary reward to anyone who volunteered to leave the flight, and when nobody took the offer, this man was unwillingly removed. United’s first response seemed to lay the blame on the passenger for not obeying instructions, but later they issued a fuller apology in conjunction with refunding the tickets of all of the passengers on his flight. This did not keep public perception from plummeting, along with it’s market value, which dropped over $1 billion dollars after incident.

1. Equifax

Equifax suffered a data breach in September of 2017 that exposed the personal data of more than 145.5 million customers. This includes everything from names, to birth dates, to social security numbers, and has put millions of people in danger of identity theft. This is a mind-blowing level of negligence, and scary for everyone involved.

As for the company’s response, after their CEO Richard Smith stepped down following the data breach, interim CEO Paulino do Rego Barros Jr. came out with a statement saying that after the hack Equifax, “...compounded the problem with insufficient support for consumers.” Expanding on this saying that, “Our website did not function as it should have, and our call center couldn’t manage the volume of calls we received.” He then promised that they will do all that they can to better support their customers. Will this promise save Equifax? Who knows, but it doesn’t look good.  

Conclusion

While these customer experience blunders give executives nightmares, some companies are doing things right. Check out these NPS® leaders doing CX and Net Promoter right: here

Next Up: Meet the Gaugies: Camilla Scholten, COO & Founding Partner

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