Wells Fargo says 1.4 million new phony accounts uncovered

NEW YORK, USA – Troubled commercial banking giant Wells Fargo said Thursday, August 31, it had uncovered 1.4 million more suspect customer accounts, part of a broadening scandal that has rocked the bank since last year.

The new total brings the number to 3.5 million potentially phony accounts opened without customers’ consent or knowledge, which caused damaged credit scores and millions in unjustified fees, the bank said in a statement.

“We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank,” CEO Tim Sloan said in a statement.

Wells Fargo became engulfed in scandal last year after admitting its employees had opened millions of phony deposit accounts and lines of credit — part of high pressure retail sales tactics the bank touted to investors but has since repudiated.

The additional problem accounts were uncovered after the bank expanded its internal investigation by three years. The expansion meant reviewing more than 165 million retail banking accounts opened between January 2009 and September 2016.

So far, Wells Fargo said it has identified about 190,000 accounts which incurred fees and charges. The company will pay $6.1 million in refunds and credits to customers.

That sum comes on top of a $142 million class-action legal settlement and $3.7 million in refunds paid following complaints from September 2016 to July of this year, the bank said.

Wells Fargo has paid $185 million in fines and offered redress to harmed customers. In October, CEO John Stumpf stepped down in the wake of the scandal, which cost it the top ranking as the world’s largest bank by market capitalization. 

But the bank’s legal woes do not appear to have abated. Last month, the company also disclosed a fresh investigation by regulators into the bank’s practice of charging fees to homeowners to maintain low interest rates on their residential mortgages for additional years. – Rappler.com