With financial experts and advisors calling it a “rogue bank,” Wells Fargo has announced an almost 70 percent increase in the number of fraudulent unauthorized accounts created by the bank in years-long effort to boost revenues through deceitful and illegal tactics aimed at Wells Fargo customers. The banking giant admitted its months-long research had uncovered 3.5 million false and unauthorized accounts created by its employees from 2009 through 2016, a rise of 1.4 million additional scam accounts opened at customer expense from the 2.1 million bogus accounts originally exposed that Wells Fargo had previously acknowledged.
The New York Times reports that the recent revelations included at least one entirely new issue, as Wells Fargo indicated there had also been as many as 528,000 instances where customers had been enrolled in the bank’s online bill pay services entirely without their knowledge or consent. Wells Fargo preemptively announced it would refund over $900,000 to customers who had been hit with fees and charges over such services. The most recent scandal joins the wide range of previous Wells Fargo Bank misconduct that includes unauthorized mortgage charges, improperly withheld car loan refunds, unconsented auto insurance sign-ups and charges, and improper customer application fee extension charges. Numerous federal and state investigations into the bank’s practices are ongoing.
Senator Elizabeth Warren, who has criticized Wells Fargo over the false accounts scandal as well as other rampant improprieties, called the news “unbelieveable,” noting that the “massive fraud” exceeded all previous estimations. The bank’s CEO noted in a conference call that the bank needed to “rebuild trust to build a better Wells Fargo,” while billionaire investor Warren Buffet, whose company’s 9.4% stake in Wells Fargo makes it the largest shareholder, observed, “What you find is there’s never just one cockroach in the kitchen when you start looking around.”
Lieff Cabraser serves as Co-Lead Counsel for the co-lead plaintiffs in a consolidated shareholder derivative action against Wells Fargo alleging that the board and executive management of the bank consciously disregarded that Wells Fargo employees were illicitly creating millions of unconsented deposit and credit card accounts, in an attempt to push sales of complementary Wells Fargo banking products to prospective or existing customers, resulting in deep damages to the bank’s reputation has led to ongoing costs in the millions in regulatory fines and lost business.