Wells Fargo Review — Another 1.4 Million Fake Accounts Found

The corporate crime wave at Wells Fargo is worse than originally reported, as fake accounts — unauthorized by customers, but still created by Wells Fargo employees — have jumped to about 3.5 million. Sadly enough, there are many other methods big banks are also now using to cheat consumers.

Nearly a year after Wells Fargo’s fraudulent account scandal burst into public view, the bank said it had turned up more than a million additional accounts that customers may not have authorized.

The news set off a fresh wave of criticism from those frustrated by the bank’s slow pace in coming clean about its misdeeds.

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Wells Fargo agreed last September to pay $185 million to settle three government lawsuits over the bank’s creation of sham accounts. Thousands of employees, trying to meet aggressive sales goals, had created accounts in customers’ names without their knowledge. Workers who met the bank’s sales targets received bonuses — and those who did not risked losing their jobs.

At the time, Wells Fargo said that 2.1 million suspect accounts had been opened from 2011 to mid-2015. But it also acknowledged at the time that the problems may have begun earlier, and said it would expand its review to include accounts opened from 2009 to 2016.

Besides the additional accounts announced Thursday, the wider review uncovered a new issue: unauthorized enrollments of customers in the bank’s online bill payment service. Wells Fargo said that it had found 528,000 cases in which customers may have been signed up without their knowledge or consent, and will refund $910,000 to customers who incurred fees or charges.

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The problems may have begun years before the period that the bank reviewed. Wells Fargo customers and former employees have said that they tried as far back as 2005 to alert bank executives to actions by branch bankers and managers. An investigation commissioned by Wells Fargo’s board found signs of abuses that surfaced in 2002.

The company said it could look back no earlier than 2009 because it did not have sufficient data on previous periods, Mr. Sloan said.

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Wells Fargo’s illegal acts have not taken much of a toll on its profit. The fines, penalties and refunds it has paid out are a small fraction of the $11 billion it earned in the first half of this year.

The review that Wells Fargo concluded on Thursday was conducted by PwC, which looked for suspicious usage patterns, like a checking account that was opened with a minimum deposit and then had the same amount withdrawn, with no further activity.

In some cases, customers discovered the fraudulent accounts only when they incurred fees on them. Wells Fargo said it has paid customers $7 million to refund those fees. It also agreed to pay $142 million to settle class-action claims over the accounts.

The review focused on retail bank accounts, and did not expand into other areas in which the bank has been accused of wrongdoing, including improperly withholding refunds that some car loan customers were due and charging some customers for auto insurance that they did not need. Wells Fargo has said previously that it would refund customers who were affected by those actions.

The bank has also been accused of handling mortgages improperly by making unauthorized changes to the loans of borrowers in bankruptcy (which it has denied) and charging customers fees to extend applications that it delayed (an issue the bank said it was looking into).