Wells Fargo: Nearly twice as many potentially fake accounts than originally thought

Wells Fargo: Nearly twice as many potentially fake accounts than originally thought
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Wells Fargo said Tuesday it opened almost twice as many potentially unauthorized banking and credit card accounts than was originally revealed, according to an independent review of the bank’s sales practices.

Wells Fargo CEO Tim Sloan said during a Tuesday conference call that an outside investigation into the bank’s sales tactics found more than 1.1 million more accounts potentially opened without customer consent, according to CNBC. That brings the total number of unauthorized accounts Wells Fargo branches opened for customers to roughly 3.5 million.


Sloan said that the independent review of 165 million accounts opened between January 2009 and September 2016 found 70 percent more unauthorized accounts than the 2016 revelations that plunged the bank into scandal. He said the bank is committed to making things right with customers.

"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," Sloan said.

The San Francisco bank has been ridden with scandal since September 2016, when federal and state regulators penalized Wells Fargo for charging customers fees for accounts they never asked to open. The Consumer Financial Protection Bureau slapped a record $185 million fine on the bank, and the scandal led to then-CEO John Stumpf’s early retirement.

Wells Fargo has made efforts to apologize and rehabilitate its image, but the depth and extent of the scandal continues to grow.

The bank insisted in November that customers who paid fees on unauthorized accounts must follow forced arbitration clauses written into those accounts’ contracts. Those clauses ban customers from seeking damages by joining class-action suits.

Wells Fargo also reportedly opened Prudential life insurance policies for customers without their consent and charged auto loan customers for insurance they never purchased.

Lawmakers on the House Financial Services Committee currently investigating the bank, as are multiple federal regulators. Financial Services Committee Chairman Jeb Hensarling (R-Texas) called Thursday's news "unacceptable and outrageous."

"This latest revelation of customer abuse is further evidence of catastrophic mismanagement at the bank," Hensarling said, promising to conduct "a serious and thorough investigation."

Rep. Maxine Waters (Calif.), the panel's ranking Democrat said she planned to introduce a bill to break up banks that frequently abuse their customers, naming Wells Fargo.

“Wells Fargo has made a routine practice of ripping off and preying on their customers, in a seemingly never-ending avalanche of scandals," Waters said. "This disgraceful, illegal, and widespread misconduct is exactly why I will be introducing legislation that breaks up banks—like Wells Fargo—that repeatedly engage in consumer abuses, so that they can never harm consumers again.”

Republicans have also requested documents from the CFPB regarding the agency's handling of the case. GOP lawmakers on the Financial Services panel, all staunchly critical of the CFPB, have said the agency was "asleep at the wheel" and jumped into the case for headlines after California state officials had already began probing Wells Fargo.

CFPB Director Richard Cordray has insisted the agency worked as quickly as it could with local officials to investigate Wells Fargo.

Top congressional Democrats and progressive leaders, including Sen. Elizabeth WarrenElizabeth WarrenWorld passes 3 million coronavirus deaths Poll: 56 percent say wealth tax is part of solution to inequality Democratic senators call on Biden to support waiving vaccine patents MORE (D-Mass.), have called on the Federal Reserve to remove Wells Fargo’s board of directors.

Warren renewed that demand today, tweeting "The [Fed] should remove every [Wells Fargo] Board member who served during this scandal. I don't know what they're waiting for."

Republicans have expressed concerns about the Fed sweeping out entire bank boards.

Updated at 2:35 p.m.