Wells Fargo uncovers more fake accounts

Wells Fargo on Thursday announced that it possibly had opened an additional 1.4 million sham accounts customers didn’t want, 67 percent more than it initially estimated, escalating a battle over the future of the bank.

The revised total, 3.5 million, means that Wells Fargo employees have been opening unauthorized credit card and bank accounts for customers for far longer than the bank acknowledged. The figure will hamper the banks’ efforts to move beyond the nearly yearlong scandal

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It also comes amid a debate over whether Wall Street has learned from its mistakes during the 2008 financial crisis and should have its regulatory reins loosened. Republicans in Congress who support such regulatory relief have acknowledged that Wells Fargo’s stumbles could make that effort more difficult.

“We apologize to everyone who was harmed by unacceptable sales practices,” Wells Fargo CEO Tim Sloan said. “We are working hard to ensure this never happens again and to build a better bank for the future.”

But even Wells Fargo’s revised figure could be underestimating the problem. For its latest review, Wells Fargo examined internal data dating to 2009 rather than 2011 as it had done initially, leading it to identify the additional 1 million fake accounts. But the bank has acknowledged that instances of unauthorized accounts have been found as far back as 2002.

The bank doesn’t plan to extend its review far enough to identify potential customers, Sloan said.

The latest review also does not address other scandals that have beset the company, including that 570,000 of its customers were charged for auto insurance they didn’t need.

Even one of Wells Fargo’s largest shareholders, Warren Buffet, appears to have become weary of the controversy. “Anytime you put focus on an organization that has hundreds of thousands of people … you may very well find that it wasn’t just the one who misbehaved that you find out about,” he said on CNBC Wednesday.

“What you find is there’s never just one cockroach in the kitchen.”