Wells Fargo Boosts Fake-Account Estimate 67% to 3.5 Million

Wells Fargo & Co. raised its estimate for how many bogus accounts employees may have created, a sign the bank is still struggling to move past a scandal that sparked record fines and congressional investigations.

An outside review into more than 165 million deposit and credit-card accounts found an additional 1.4 million that were potentially unauthorized, bringing the total to about 3.5 million, according to a statement Thursday from the San Francisco-based firm. The revised estimate covers January 2009 to September 2016, almost twice as long as the period examined in the initial review.

The disclosure of even more fraudulent accounts threatens to catapult Wells Fargo back into the political crosshairs just as Congress returns Sept. 5 from its summer recess. The scandal came to light almost a year ago after regulators slapped Wells Fargo with fines of $185 million over its sales practices, prompting congressional hearings and resulting in the bank naming new leaders, clawing back executives’ pay and beginning an overhaul of its retail division.

“New data should cause some lawmakers to re-engage on the issue,” Isaac Boltansky, an analyst with Compass Point Research & Trading, said before the new tally was announced. Democrats will again argue it proves Washington needs to keep rules tight on financial firms, while Republicans will continue to fault Consumer Financial Protection Bureau officials for not spotting the misconduct themselves, Boltansky said.

Expanded Review

Wells Fargo expanded its review after Washington lawmakers lambasted the company following former Chief Executive Officer John Stumpf’s testimony last September about the bank’s sales practices. Under pressure, the bank agreed to review records dating back to 2009, rather than through 2011 as it initially did.

Read more: How Wells Fargo’s Troubles Went From Bad to Worse

The company said it has paid or identified $10.7 million in customer compensation related to the investigation. The figure includes $7 million of refunds, up from $3.3 million the bank had previously disclosed. It also includes $3.7 million related to what it described as the “complaints process/mediation.”

“There’s never just one cockroach in the kitchen,” Berkshire Hathaway Inc. CEO Warren Buffett, whose firm is the largest shareholder in Wells Fargo, said Wednesday in an interview on CNBC. “Anytime you put the focus on an organization that has hundreds of thousands of people working for it, you may very well find it wasn’t just the one that misbehaved.”

Online Service

The expanded review also uncovered about 528,000 potentially unauthorized online bill-pay enrollments, highlighting users with only one “minimal” payment and no further use of the service. “The analysis did not definitively identify whether an enrollment was authorized by a customer or not, and properly authorized enrollments are likely part of this total,” Wells Fargo said in the statement, adding that affected customers will be refunded $910,000 for related fees and charges. 

“Today’s announcement is a reminder of the disappointment that we caused to our customers and stakeholders,” CEO Tim Sloan said on a conference call Thursday with reporters. “We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank.”

The company has no other reviews under way and isn’t planning additional ones, allowing it to focus on making refunds to customers, according to Oscar Suris, a spokesman. Sloan said no additional Wells Fargo workers will be fired in the wake of the new findings.

Shares of the company, which have dropped 7.3 percent this year, declined 0.3 percent to $51.07 at 4 p.m. in New York trading.

Read how Congress is reacting to Wells Fargo’s new disclosures

Democrats led by Representative Maxine Waters of California earlier this month called for a House Financial Services Committee hearing about a separate scandal at Wells Fargo involving unwanted car insurance imposed on auto-loan customers. And Senator Elizabeth Warren of Massachusetts wrote to the Federal Reserve to again press for the removal of board members who served during the original accounts review period of 2011 to 2015.

Wells Fargo has worked to minimize the impact of the new tally, describing the additional accounts as those it couldn’t rule out from lacking customer authorization. Sloan said the company erred on the side of its customers during the review, so the figures might include some accounts that were properly authorized.

When it fined Wells Fargo last year, the CFPB ordered the bank to identify all customers affected by its sales misconduct and set aside $5 million for those harmed.

The new review doesn’t go back as far as 2002, the year that executives first knew about the sales misconduct and fired employees over it, according to investigators hired by the company’s board. Lawyers representing customers who said they were harmed by the bank’s abusive sales practices claimed in a lawsuit, known as Jabbari v Wells Fargo, that bank employees probably created 3.5 million bogus accounts starting in May 2002. Wells Fargo is awaiting final approval to settle that case for $142 million.

“We’re very comfortable that the amount of the Jabbari settlement is more than sufficient to address the needs of our current and former customers,” Sloan said on the call.

Also Thursday, Vanguard Group Inc. released records showing its funds voted against the re-election of three Wells Fargo directors at the bank’s April 25 annual meeting, including Chairman Stephen Sanger and risk committee chair Enrique Hernandez. BlackRock Inc. voted against seven directors, disclosures show. The bank said this month that Sanger, who received 56 percent support, will be replaced by Elizabeth “Betsy” Duke next year.

    More From this publisher : HERE

      Recommended Products

    • Instamate Premium Monthly Instamate is the worlds first all in 1 web based Instagram tool that finds the most viral content on FB, Instagram and Pinterest then allowing you to post and Schedule directed from the computer.
    • Builderall Internet Marketing Platform - Special Promo - Top Affiliates Create and automate with the easiest and most complete internet marketing platform available on the market today! Easily capture and manage leads, discover time-saving applications, create unlimited and professional "Drag and Drop" websites and sales funnel
    • Commission Sumo Unlimited and Developers Commission Sumo is a WordPress plugin that lets you automatically add hyperlinked keywords throughout content on your blog and then adds in targeted mini lightbox ads when the curious user hovers their mouse over the keyword.
    • EZ Spokesperson Creator - Personal Create your own amazing spokesperson videos using our massive library and easy cloud-based editing program.

    If you like our content help us with a share… or two …  

    Also -  I have some free stuff for you .......

    Nr 1. Top 10 Email Marketing Mistakes. Which of these mistakes do you make?

     

    Nr 2.  You can learn about : The hottest social networking site that will send an unlimited stampede of traffic to your site - for FREE! How to quickly locate a swarm of hungry buyers using "information portals"! The fast and easy way to use simple images to siphon targeted traffic, on command! Learn how to get the most possible traffic from Instagram, and make sure that traffic converts! And much more ...

     

    Nr 3. It’s no secret… Facebook is an incredible place to get tons of free, viral traffic. But… most people are going about it all wrong.  How many of these mistakes are you making? Download the free report to find out.

       

    Nr 4.  Special free report .  It's called "Operation Midas Touch" and you can download it here...

    The report features a surefire method for generating at least $1000 per week online,without a website or product of your own!

    Nr 5.  Instagram is still one of the hottest ways to get a LOT of traffic fast. All by sharing images. Sounds easy enough, yeah? Well, yes and no. If you want to really start driving a lot of  traffic and making sales using Instagram then you should download this report.

    Nr 6.  When it comes to creating a product online there are so many ways to approach it. Wouldn’t it be great to just get the meat of it all so you can get started faster? Well, the good news is, today you can download a guide called the Product Creation Formula Quickstart Guide. It’s as the title suggests - a Quickstart guide. You’ll get a list of action steps to take right away. Download your copy today !

    Nr 7. Would you like to finally USE all of that dusty PLR you have sitting around on your harddrive? Or maybe find the resources for the best PLR available - at the best prices? What about how to use that PLR to make you money with just a few minutes of work. Well, you’re not going to want to miss this!

      Nr 8. Buzzfeed’s top post has more than 21 million views. Think about that for a sec… ONE of their articles has had over 21 million people who have read it! And they have thousands of articles... what would you do with that kind of traffic? A friend of mine hacked their method and was able to use it to get 11,592 targeted new subscribers in 2 weeks on their very first attempt!

    Nr 9. Push notifications are one of today's hottest trends in website traffic and conversions, and for good reason. Studies have shown that as many as 40% of people will opt-in for push notifications, which is about TEN TIMES the rate of people who opt-in for emails! That’s huge! Not only that, but they're also highly effective at pulling clicks, as well. Some studies have shown CTR at an average of around 40%, with highs of as much as 80%! Again, that’s huge!

    Nr 10. Would you like to know how to get more money from the exact same number of website visitors you’re currently getting? Even if you’re website is getting as few as 1-2 visitors a day, this report will show you how to increase your profits using these few handy hacks.

    Nr 11. People have now realised that it's not the size of the list which matters, it's the quality. ... and the only way to create a quality list is by launching your own products. Let it be $7 ebooks, $17 info products, $27 video training product or software's... all of these work. My good friend Kevin Fahey has is revealing how he's launched over 20 products in the past 4 years, many of them top sellers. Needless to say he's banked a handsome amount in this time.

    Nr 12. Do you ever feel that the man you like or even love, just doesn't see you or desire you in way you want him to? Or... maybe you're able to get a man's attention though not the right kind of attention? Or... maybe you're still single because you wait and wait for men to approach you first? What you may not know is that the way we flirt will either attract the "wrong" man for us or the "right" man.

    Nr 13. When it comes to getting sales and leads online, there is ONE thing that 95% of marketers use... it's called a LIST. My friend Jimmy just released a free book that explains WHY a list is important and how YOU can build your own list. It's available right here (and it won't cost you a penny)

    Nr 14. If you have tried everything, and still aren't able to get your Ex back, then you need to pay attention.

    Nr 15. What if I told you that you could make ANY woman WANT to do ANYTHING for you? Would you think I'm crazy? Well... what If I told you that you could also make her LOVE every minute of it and come back for more?

       

    Nr 16. I have a special free plugin for you today. It's called "Covert Hover Mini"

    This plugin will triple your blog traffic by compelling your visitors to share your images on social media. This is some really clever stuff and it works like a charm. After you grab your free plugin, don't  forget to read the free bonus report as it will show exactly how and why this strategy works like crazy.

    Nr 17. The days of being able to get away with a basic WP theme and a pic or two are gone, your site needs to look good. Even Google are looking for you to have engaging graphics on your site. But getting good quality graphics made for your site is a pain, AND it will cost you both time and money (if you outsource it). But I have a special free download for you today. A virtual treasure chest of over 21K profit pulling graphics you can start sing today to generate more traffic & sales!

    Nr 18. 20 professional full HD background videos. These background videos are perfect for giving your videos that extra kick they need to stand out from the crowd Oh yeah they are in full 1080p HD too, I hope you'll enjoy them.

    Nr 19. If you've ever failed to create a WordPress site of your own or typically waste hours & even weeks trying to figure it all out on your own....

    Nr 20. No doubt, you've seen all of the video launches lately! There is a reason for it... Video marketing is a GREAT way to make money, and with the recent creation tools making it super accessable for anyone to get started... It's no surprise that more people are making videos. However... there is a missing element to most video marketing products...

     

    Nr 21. For the first time ever... You can get the straight scoop on how someone is selling over $1,000,000/year of t-shirts on Facebook!

    Use them  .... and have fun !