Wells Fargo uncovers over 1 million more fraudulent accounts

Wells Fargo previously revealed that over 2.1 million accounts were fraudulently opened due to a culture of high pressure sales tactics. Today they revealed that an additional 1.4 million fraudulent accounts bringing the total to 3.5 million.

In addition, over 500,000 folks were potentially enrolled in online bill-pay without their authorization.

Wells Fargo expanded its review after Washington lawmakers lambasted the company following former Chief Executive Officer John Stumpf’s testimony last September about the bank’s sales practices. Under pressure, the bank agreed to review records dating back to 2009, rather than through 2011 as it initially did.

The company said it has paid or identified $10.7 million in customer compensation related to the investigation. The figure includes $7 million of refunds, up from $3.3 million the bank had previously disclosed. It also includes $3.7 million related to what it described as the “complaints process/mediation.”

“There’s never just one cockroach in the kitchen,” Berkshire Hathaway Inc. CEO Warren Buffett, whose firm is the largest shareholder in Wells Fargo, said Wednesday in an interview on CNBC. “Anytime you put the focus on an organization that has hundreds of thousands of people working for it, you may very well find it wasn’t just the one that misbehaved.”

Fortunately I don’t have a banking relationship with Wells Fargo because if I did, I would be leaving quickly.

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