June 13, 2014
Bank of America Paying Up
When you make a minor mistake with your bank account, it can lead to a very uncomfortable “hat in hand” trip to the office to try to sort things out. But, when the bank itself makes a mistake, it can lead to a massive crisis Public Relations scenario.
CEO and Founder of 5W Public Relations, Ronn Torossian explains: One of the nation’s top banking institutions, Bank of America, is currently negotiating a deal with the Justice Departments, as well as several individual states, that could mean a $12 billion settlement. The deal is based on allegations of misdealings related to the institution’s mortgage practices. While many banks have been tarred by the specter of selling risky loans, this particular claim involves misleading buyers of mortgage backed securities about the quality and risk level of the investments.
Even after the deal is done, and the pound of flesh is taken, BOA will have a tough row to hoe re-establishing its record among investors, particularly those prone to looking for less risk and decent return. When the most careful investors see their money suffer due to mistakes, they are much more reticent to reinvest, at least with BOA. And, let’s face it, there are plenty of other potential investment opportunities out there.
That’s why Bank of America’s subsequent public relations campaign must make their good decisions and their course corrections very public matters. People need to see, not exactly what went wrong, but what BOA is doing to make sure it does not happen again. Depending on how calculated and effusive BOA chooses to be, the process could be a long slog back to the top or it could be a much shorter trip.
Should be an interesting public relations effort to watch.