Wells Fargo Reports More Problem Accounts

The bank says it may have created up to 3.5 million accounts without customers’ authorization, well in excess of its previous 2.1 million estimate.
Matthew HellerSeptember 1, 2017

The fake accounts scandal at Wells Fargo widened as the bank reported it may have created up to 3.5 million retail banking accounts without customers’ authorization, a number well in excess of its previous estimate.

Wells Fargo on Thursday said an expanded review conducted by PwC identified up to 1.4 million potentially unauthorized accounts on top of the 2.1 million it had previously acknowledged. The total of 3.5 million matches the estimate of plaintiffs’ attorneys who brought a class action lawsuit on behalf of customers.

The review also uncovered a new problem — roughly 528,000 potentially unauthorized online bill pay enrollments.

“We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank,” Wells Fargo CEO Tim Sloan said in a news release. “To rebuild trust and to build a better Wells Fargo, our first priority is to make things right for our customers, and the completion of this expanded third-party analysis is an important milestone.”

The bank said it will now pay a total of $6.1 million to refund customers for unauthorized bank and credit card accounts, up from $3.3 million previously, and $910,000 to refund customers for the potentially improper online bill pay enrollments.

Wells Fargo has been seeking to put the scandal behind it since it agreed last September to pay $185 million in fines to regulators. But as the Los Angeles Times reports, the discovery of additional unauthorized accounts “gave new ammunition to critics of the bank.”

“Wells Fargo’s misdeeds are egregious, and they must be held accountable for their many abuses of American consumers,” said Rep. Maxine Waters (D-Calif.), the ranking minority member of the House Financial Services Committee.

While the original review covered accounts opened from May 2011 through mid-2015, the expanded analysis reviewed those opened from January 2009 through September 2016.

“Every new disclosure seems to expand the scope of the bank’s troubles, which creates the perception that the scandal is getting bigger rather than going away,” Jaret Seiberg, an analyst at Cowen Washington Research Group, wrote in a report.