Wells Fargo needs more time to re­view al­le­ga­tions

Kuwait Times - - BUSINESS -

SAN FRAN­CISCO: Wells Fargo & Co is ex­pand­ing an in­ter­nal re­view of its sales prac­tices and says the move could un­cover sig­nif­i­cantly more ac­counts opened by bank em­ploy­ees with­out cus­tomers’ con­sent. The San Fran­cisco bank dis­closed the broad­ened re­view in a fil­ing Fri­day with the Se­cu­ri­ties and Ex­change Com­mis­sion. Wells Fargo has been try­ing to re­pair its rep­u­ta­tion af­ter ad­mit­ting last fall that em­ploy­ees un­der pres­sure to meet ag­gres­sive sales tar­gets opened as many as 2 mil­lion ac­counts with­out get­ting cus­tomers’ per­mis­sion. The com­pany ended up pay­ing $185 mil­lion to reg­u­la­tors and set­tled a class-ac­tion suit for $142 mil­lion.

The lender is now ex­pand­ing its re­view of cus­tomer ac­counts go­ing back to 2009. Ini­tially, it planned to re­view ac­counts go­ing back to 2011. It also ex­pects to com­plete a re­view of po­ten­tially unau­tho­rized ac­counts iden­ti­fied by a con­sult­ing firm. “We ex­pect that our re­view of the ex­panded time pe­ri­ods, which adds over three years to the ini­tial re­view pe­riod of ap­prox­i­mately four years ... may lead to a sig­nif­i­cant in­crease in the iden­ti­fied num­ber of po­ten­tially unau­tho­rized ac­counts,” the com­pany said in the fil­ing.

Wells Fargo projects that its re­view will be fin­ished by the end of the third quar­ter. It doesn’t ex­pect any costs stem­ming from the re­view to have a sig­nif­i­cant im­pact on the com­pany. Last month, the com­pany dis­closed that roughly 570,000 cus­tomers were signed up for and billed for car in­sur­ance that they didn’t need or nec­es­sar­ily know about. Many couldn’t af­ford the ex­tra costs and fell be­hind in their pay­ments. In about 20,000 cases, cars were re­pos­sessed.

The bank has agreed to pay $80 mil­lion in re­funds and ac­count ad­just­ments to cus­tomers, with checks start­ing to go out this month. Wells ac­knowl­edged that its sys­tems signed up cus­tomers who al­ready had in­sur­ance. — AP


JACK­SON: A Wells Fargo bank in north­east Jack­son, Mis­sis­sippi. At least three law­suits have now been filed against Wells Fargo from cus­tomers who say they were hurt by the bank’s lat­est scan­dal, in­volv­ing how it op­er­ated its auto lend­ing busi­ness.

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