Compliance Management, Privacy

Wells Fargo finds 1.4 million additional fake accounts created

Wells Fargo admitted today that an additional 1.4 million fraudulent accounts may have been created by its employees over an eight year span, in addition to the 2.1 million such accounts that were revealed last year.

The new figure is the result of a second company investigation that delved into 165 million retail banking accounts that were opened between January 2009 and September 2016, the company said in a statement. The original 2.1 million fake accounts were found during a separate study of 93 million accounts that were created between May 2011 and 2015.

In order to make the false accounts appear legitimate the workers accessed their customer's personal records and created fake email addresses and enrolled the accounts in various online banking programs using the names and personal information of actual Wells Fargo customers. Debit cards and PINs were also issued in the customer's name.

The scheme resulted in about 130,000 customers being charged fines for having insufficient funds and overdraft fees on the fake accounts that they did not know existed in their names. Customers were also charged finance and interest charges on the unauthorized cards created in their name.

The new study found additional 60,000 people had been similarly charged. Wells Fargo said in a statement these victims will be reimbursed.

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

Sloan replaced John Stumpf, who was forced out of his position by the scandal that also saw 5,300 Wells Fargo employees fired. In addition, the Consumer Financial Protection Bureau fined the company $185 million. The Bureaus report found that employees created the false accounts in order to meet sales goals.

“Spurred by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers' authorized accounts without their knowledge or consent, often racking up fees or other charges,” the CFPB wrote.

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