Several months ago a court found that Wells Fargo employees had opened fake accounts in the names of existing customers in order to satisfy certain activation quotas. With this ruling, the bank, of course, had to refund customers fees and other charges as well as pay penalties.
Well, this week, the nation’s third-largest bank agreed to expand its review of the cases after lawmakers in Washington continued to question former Wells Fargo Chief Executive Officer John Stump’s testimony from nearly a year ago regarding the bank’s sales practices. As such, the bank will now continue to look at records as far back as 2009, two years longer than the initial ruling required.
The company has stated it has already paid (or identified with intent to pay) $10.7 million in compensation to customers in relation to this investigation. This figure includes 7 million in refunds but that is more than double what the bank had previously disclosed. In addition, though, the figure also includes $3.7 million in payments that went towards “complaints process/mediation.”
And now, the bank will also have to return another $2.8 million to an additional 1.4 million customers who have brought an argument since the case started, regarding consumer or small business accounts opened in their name without consent. From this, the bank will return $910,000 to approximately 528,000 people who were enrolled in online billpay services without permission.
In all, the updated numbers posit around 3.5 million potentially fraudulent credit card accounts (up from the original number of 2.1 million) and about 190,000 legitimate accounts hit with unnecessary fees (up from the original number of 130,000). Also, the new investigation suggests 528,000 unauthorized enrollments in the billpay program.
Chief Executive Tim Sloan comments, “With the expanded analysis now complete, we will focus on remediation and making things right for our customers.”
One way to remediate the problem was to fire roughly 300 employees involved with the scandal. The other way, of course, is to compensate those who have been defrauded; so this is probably just the start.
He goes on to say, “Today’s announcement is a reminder of the disappointment that we caused to our customers and stakeholders. We apologize to everyone who was harmed
by unacceptable sales practices that occurred in our retail bank.”