Wells Fargo: Fake bank account scandal bigger than first thought
by Leigh Jones
Posted 8/31/17, 12:12 pm
Wells Fargo announced Thursday its fake bank account scandal is much worse than first disclosed. Investigators say bank employees opened 3.5 million accounts without customers’ knowledge, up from the 2.1 million initially discovered. The bank thought the scandal began in 2011 but quickly realized it stretched as far back as 2009. Wells Fargo employees opened the accounts under pressure from managers to meet aggressive sales targets. Bank officials hired an outside consulting firm to analyze 165 million retail accounts opened between 2009 and 2016. The scandal has been costly for the bank. Federal regulators assessed $185 million in fines, and Wells Fargo settled a class-action lawsuit out of court for $142 million. It also refunded $3.3 million in fees and charges accrued on fake accounts and said today it would refund an additional $2.8 million. Last month the bank revealed more shady dealings: Employees enrolled about 570,000 customers in auto insurance plans they didn’t need or didn’t know about. The extra costs caused some to fall behind in payments, leading to at least 20,000 repossessions.
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Leigh lives in Houston with her husband and daughter. She is WORLD Digital’s managing editor and reports on education for WORLD Magazine and WORLD Digital.