Too little, too late.

That's the upshot of why Wells Fargo has been unable to quell the furor over fake accounts opened by former employees engaging in illegal practices, according to experts.

The bank failed to hold any senior executives accountable for its problems, missed chances to fix issues early on, waited more than a week to formally apologize for its mistakes, blamed thousands of low-level employees and generally appeared to underestimate the size and scope of the public backlash to its behavior.

That culminated in a disastrous hearing for Wells Fargo Chief Executive John Stumpf this week, where he struggled to rationalize sometimes conflicting messages from the bank and seemed unprepared for basic questions about when the fraud was uncovered and he became aware of it.

Following is a guide to what the bank did wrong.

It failed to hold senior leadership accountable

The bank has repeatedly pinned the blame on the 5,300 former employees who were fired for opening roughly two million phony accounts. The problem, experts say, is that the bank appeared unable or unwilling to believe that the culture at the institution contributed to the widespread fraud.

As a result, though it fired lower-level employees and even a regional president, the bank did not go far enough.

"It's very important in a crisis to make some sort of sacrifice such as firing somebody," said Gene Grabowski, a partner at kglobal whose clients have included AIG, the multinational insurance company that was a central player in the 2008 financial crisis. "If you don't make a sacrifice, you appear arrogant and you lose trust."

(Bloomberg News)
(Bloomberg News)

By pinning the blame on low-paid employees, Stumpf only fueled public anger at the bank, especially as it compared to the millions paid to top executives like Carrie Tolstedt, the head of community banking who was allowed to retire in July with a reported $125 million pay package.

"They are doing what a lot of big companies do, which is to make scapegoats out of people least able to defend themselves, and that won't work if you're trying to restore your reputation," said Grabowski, who has represented Rosie O'Donnell and Roger Clemens. "It's as if Wells Fargo feels it's above the laws of common sense, let alone a court of law."

Wells' apology was late and halfhearted

The day after the settlement with regulators was announced Sept. 8, the bank took out full-page ads in several newspapers expressing regret.

But there was no actual apology until Stumpf appeared before the Senate Banking Committee on Sept. 19. "I am deeply sorry that we've failed to fulfill on our responsibility to our customers, to our team members and to the American public," Stumpf said in his opening statement.

But lawmakers questioned why there was no apology in the company's direct communications with its customers.

"You didn't tell them you were sorry in your customer service letter," said Sen. Dean Heller, R-Nev. "You came to this committee and told us you were sorry, but you didn't tell your customers you were sorry."

Tom Fladung, a vice president at Hennes Communications in Cleveland, said Wells and Stumpf were slow to apologize.

"Wells was following a crisis communications playbook in which they were sorry this happened, but they weren't," Fladung said. "The whole thing feels like a grudging apology. If you mess up, you have to fess up and fix up, and you have to do it sincerely and the fix-up has to have real teeth in it."

Wells repeatedly missed opportunities to fix the problem

Articles by the Los Angeles Times in 2013 led to a lawsuit by the city's attorney, Mike Feuer, and ultimately paved the way for the $185 million in fines and restitution paid by the bank as part of a regulatory settlement announced two weeks ago.

But when those articles first came out, Wells initially fought back hard against the claims. Bank officials argued that Wells did not have a problem with its sales culture. Tim Sloan, Wells' chief financial officer, told the paper that he was "not aware of any overbearing sales culture."

"They didn't agree with the narrative, which was raised by the L.A. Times and damaged the brand," said Ed Mills, an analyst and managing director at FBR. "The way they were running their business did not flag this activity that was fraudulent, or a scam or something systemic."

In doing so, the company missed a chance to deal with the scandal far earlier and potentially mitigate some of the damage.

In many ways, Wells appeared to be hampered by its vision of itself as a Main Street bank in which employees built personal relationships with customers.

Instead, former employees are coming out of the woodworks to describe Wells' cutthroat sales culture, in which they were threatened with being fired and forced to work weekends and holidays without pay to meet stringent sales goals. Moreover, Wells keeps copious reports on product sales. One lawsuit by former employees listed 20 different reports tracking account openings, lucrative add-on products and unauthorized accounts.

"What [Stumpf] is not owning up to enough is that the tone at the top could have created a pressure-cooker environment that could have caused employees to do this," said Marty Mosby, an analyst at Vining Sparks.

For decades, Wells has touted its longtime strategy of cross-selling as the reason behind its success. But these revelations have undermined the bank's story and its public credibility.

"It doesn't ring as authentic because it took them five years," Fladung said. "Wells Fargo hasn't really embraced being honest with themselves about this, and until they do the public is not going to see them as being honest."

Oscar Suris, Wells' head spokesman, reiterated Stumpf's response to lawmakers that there was more Wells should have done sooner.

"We get that very loud and clear," Suris said. "We are trying to tackle the issues on unethical practices that are causing us concern too."

Its messaging was confusing

Wells appears to have sought to hit all the right notes of responding to a crisis, including a public apology (even if belated) and promises to fix the problem by scrapping sales goals for employees in its retail banking business.

Yet it also sought to downplay the extent of the problems, emphasizing that the 5,300 employees represented just 1% of its retail employees. And it is ultimately keeping incentive pay, just basing it on other metrics like customer surveys.

Both positions angered lawmakers. "5,300 people are more people than live in most towns in Montana," said Sen. Jon Tester, D-Mont.

Moreover, certain basic facts are still unclear. Stumpf said Tuesday that Tolstedt was not fired but chose to resign. Yet he also said that she'd been told the bank was headed "in a different direction," strongly hinting she was pushed out the door.

It's also unclear why Wells failed to disclose the investigation in its SEC filings and exactly when Stumpf and senior leadership became aware of problems.

"He did not have a firm timeline," Mills at FBR said. "He had trouble answering the questions: What did you know and when did you know it? We learned this in Watergate."