Banking, finance, and taxes

Even More Affected Accounts Found in Wells Fargo Scandal

Chris Lange

Published: August 31, 2017 11:10 am

Last Updated: January 12, 2020 8:36 am

Wells Fargo & Co. (NYSE: WFC) has yet to escape controversy in 2017. The megabank has announced the completion of its third-party review of retail banking accounts dating back to 2009. What reviewers found was more than what they bargained for.

For those who aren’t familiar with the situation: Wells Fargo illegally opened a number of accounts for its customers without their knowledge or consent between 2009 and 2016. Although a number of employees were fired for this practice, the “unreasonable” sales goals to promote this cross-sell came from management, and former CEO John Stumpf had to take the fall for this one — albeit with a golden parachute.

As for the original account analysis, 93.5 million current and former customer accounts were opened in roughly a four-and-a-half-year period — from May 2011 through mid-2015 — and approximately 2.1 million potentially unauthorized accounts were identified. The expanded analysis reviewed more than 165 million retail banking accounts opened over a nearly eight-year period — from January 2009 through September 2016 — and t identified a new total of approximately 3.5 million potentially unauthorized consumer and small business accounts.

In connection with these 3.5 million potentially unauthorized accounts, about 190,000 accounts incurred fees and charges, up from the 130,000 previously identified accounts that incurred fees and charges.

Wells Fargo will provide a total of $2.8 million in additional refunds and credits on top of the $3.3 million previously refunded as a result of the original account review. Although the $6.1 million the megabank is planning to give back seems like a nice chunk of change, keep in mind that for the 2017 full year analysts are calling for Wells Fargo to have revenues totaling about $89.56 billion.

Tim Sloan, Wells Fargo’s CEO, commented:

We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank. 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. 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. Our commitment has never been stronger to build a better bank for our customers, team members, shareholders and communities.

Shares of Wells Fargo were last seen down about 0.4% to $51.16 on Thursday, with a consensus analyst price target of $57.62 and a 52-week range of $43.55 to $59.99.