Wells Fargo Finds 1.4M More Possible Sham Accounts

SAN FRANCISCO (CN) – Wells Fargo’s phony accounts scandal has widened to include another 1.4 million potentially unauthorized accounts opened in customers’ names between 2009 and 2016, the San Francisco-based bank said Thursday.

(AP Photo/CX Matiash, File)

A prior audit of 93.5 million accounts over a 4.5-year period found some 2.1 million unauthorized accounts were opened by bank employees struggling to meet Wells Fargo’s aggressive sales quotas.

An expanded review of more than 165 million accounts over a nearly eight-year period from January 2009 to September 2016 found the number of unauthorized accounts is likely 3.5 million, 67 percent more than originally estimated, the bank said.

The review, conducted by an outside consulting firm, also found customers were charged for 190,000 bogus accounts, up from the 130,000 previously reported.

In a statement released Thursday, Wells Fargo CEO Tim Sloan said the bank’s first priority is “making things right” for customers, and he called the completion of the expanded review “an important milestone” in that effort.

“We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank,” Sloan said. “Through this expanded review, as well as the class action settlement, free mediation services, and ongoing outreach and complaint resolution, we’ve cast a wide net to reach customers and address their remaining concerns.”

Wells Fargo has pledged an additional $2.8 million in refunds and credits, on top of $3.3 million previously made available, for those who incurred fees for the bogus accounts.

One recurrent, harsh critic of the bank, U.S. Sen. Elizabeth Warren, D-Mass., wasted no time seizing on the news to repeat her call for the dismantling of Wells Fargo’s board of directors.

“The @federalreserve should remove every @wellsfargo Board member who served during this scandal. I don’t know what they’re waiting for,” Warren tweeted Thursday.

Earlier this month, Wells Fargo made some changes to its board, retiring two long-serving directors and having former Vice Chair Elizabeth “Betsy” Duke take over as chairman in place of Stephen Sanger, who will retire earlier than expected at the end of this year.

Former CEO John Stumpf resigned from his position in October last year amid criticism that the bank fired some 5,300 lower-level employees while failing to penalize senior executives that pushed the aggressive cross-selling program that led workers to open the bogus accounts.

In July, a judge tentatively approved a $142 million deal to settle claims over Wells Fargo opening the estimated 3.5 million sham accounts over a 15-year period from 2002 to 2017.

The bank was also rocked by another scandal this summer when the New York Times revealed it billed more than 800,000 auto loan customers for unnecessary auto insurance coverage, receiving kickbacks from an insurance company and causing an estimated 20,000 wrongful vehicle repossessions.

In September 2016, Wells Fargo paid $185 million to federal regulators for the unauthorized opening of sham accounts.

The bank said it has ended its sales quota program, clawed back $75 million from two former top executives, and agreed to pay another $32 million for the sham accounts scandal.

Wells Fargo also faces a shareholder class action claiming the board of directors breached its fiduciary duty by failing to stop the scandal that has cost the bank more than $300 million in fines and settlements and potentially billions more in lost revenue.

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