In fall 2016, Wells Fargo earned the wrath of millions of people, including Senator Elizabeth Warren, who ripped the banking giant over its scandal involving millions of fake accounts that were forged by employees attempting to earn bonuses and meet quotas. The scandal ultimately revealed fraudulent behavior on behalf of now-ousted CEO John Stumpf, and countless employees and executives were fired. Now, Wells Fargo is admitting that the number of fake accounts was much greater than previously reported. And more!
CNN Money reports that Wells Fargo’s ongoing internal investigation revealed how the scandal’s roots keep growing and illuminate a truly “broken sales culture.” Instead of the already astronomical 2.4 million fake accounts that were already unearthed, the number actually sits at 3.5 million. Not only that, but the probe has uncovered more fraudulent activity, including extra fees imposed upon customers and unauthorized bill pay enrollment:
About 190,000 accounts were slapped with unnecessary fees for these accounts, Wells Fargo said. That’s up from 130,000 previously.
Wells Fargo also discovered a new problem: thousands of customers were also enrolled in online bill pay without their authorization. The review found 528,000 potentially unauthorized online bill pay enrollments.
The New York Times reports that these additional Wells Fargo clients will see returned fees to the tune of $2.8 million for fake accounts and $910,000 for the online-billpay-associated fraud. This won’t affect the conglomerate’s bottom line too much in an immediate sense, but it will continue to sow the seeds of distrust for Wells Fargo’s “once-pristine brand.”
As if to reinforce this point, Warren Buffet has chimed to tell CNBC, “There’s never just one cockroach in the kitchen.” Although it must be noted that Buffett has publicly berated the bank, but he previously dragged his feet on selling shares. Finally in April, he did cut his stake in the company, and this probe will keep shining a light on the aforementioned roaches.
(Via CNN Money, New York Times & CNBC)