Review adds to troubles for bank

Wells Fargo finds more sales fraud

Wells Fargo said Thursday that an internal review of its potentially fraudulent bank accounts had uncovered a total of 3.5 million such accounts, some 1.4 million more than it had previously estimated.

The bank also raised a new issue: unauthorized enrollments of customers in the bank’s online bill payment service. Wells Fargo said 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.

“We are working hard to ensure this never happens again and to build a better bank for the future,” Timothy J. Sloan, Wells Fargo’s chief executive, said in a written statement announcing the review’s results. “We apologize to everyone who was harmed.”

Wells Fargo touched off a scandal last September when it agreed to pay $185 million to settle three government lawsuits over the bank’s creation of potentially millions of unauthorized customer accounts.

Wells Fargo has acknowledged that thousands

of employees, trying to meet aggressive sales goals, created accounts in customers’ names without their knowledge. Employees received bonuses for meeting the bank’s sales targets — and risked losing their jobs if they fell short.

At the time, the bank said 2.1 million suspect accounts had been opened from 2011 to mid-2015. The bank later expanded its review by three years and examined 165 million

bank accounts that were created from January 2009 through September 2016.

That review turned up the additional accounts that may have been fraudulent — a nearly 70 percent increase over Wells Fargo’s initial estimate.

The bank’s internal review is now complete, Sloan said.

“We’ve cast a wide net to reach customers and address their remaining concerns,” he said.

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 scandal over the accounts — and the corporate culture that allowed them to go undetected for so long — toppled Wells Fargo’s chief executive. Several investigations by the Justice Department and state attorneys general remain in progress.

Wells Fargo customers and former employees have

said they tried more than a decade ago to alert bank executives to misdeeds by branch bankers and managers. The company decided to go back only to 2009 in its review because it did not have sufficient data on prior periods, Sloan said on a call with reporters.

The review Wells Fargo concluded Thursday 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 were

owed to some car loan customers 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 is looking into).