Wells Fargo has revealed that another 1.4 million sham accounts had been opened at the bank. This is 67% more than had originally been estimated and now the total stands at 3.5 million sham accounts. The total was revised after a discovery that the fake accounts scandal may have been going on longer than had initially been thought. Efforts by the bank to move on are likely to be hampered as scrutiny from regulators and lawmakers will now increase.
According to Wells Fargo about 500,000 of the sham accounts that had been newly discovered were missed in the course of the initial review which had covered the years between 2011 and 2015. Evidence that the scandal had been running for longer came to light after the issue was publicly acknowledged for the first time. A consulting firm was then hired and charged with the responsibility of analyzing retail bank accounts numbering 165 million which were opened from 2009 to 2016.
The consulting firm then discovered that besides the 2.1 million fake accounts that had initially been known about, there were 981,000 more sham accounts which were opened in the years that were added to the timeless. Approximately 450,000 sham accounts were also discovered to have been opened in the timeline that had originally been given.
The scandal is the biggest in the history of Wells Fargo and it has already led to the resignation of a chief executive officer as well as other executives. Besides the reputation of the bank now being in tatters, Wells Fargo has also had to pay to regulators fines amounting to $185 million. The bank has also had to settle a class-action lawsuit worth $142 million.
This is not the only shocking revelation to arise out of the growing scandal. In July it was revealed that more than half a million customers unknowingly got signed up for as well as billed for motor vehicle insurance. Some of the customers were unable to afford the extra charges and consequently they fell behind in making payments with the result being that about 20,000 of them had their vehicles repossessed.
In a bid to rebuild trust Wells Fargo has changed sales practices. The bank has also requested its customers to find out whether they are victims in the fake accounts scandal.
“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,” said the chief executive officer of Wells Fargo, Tim Sloan.