Wells Fargo fake accounts scandal is on the worse way

Wells Fargo is now saying 3.5 million customers were impacted by its fake accounts scandal, a dramatic increase from the 2.1 million accounts it originally estimated.
    
In the weeks and months after the bank acknowledged in September 2016 that its employees opened 2.1 million accounts without getting customers' permission, the bank agreed to look for fake accounts going back an additional two years to 2009. This was because news reports showed that problems at Wells started before 2011, which is what Wells originally admitted.
    
Wells plans to pay out an additional $2.8 million in refunds to the impacted customers.

"The fact that the company has completed its comprehensive third-party account review and has communicated the finality of its customer remediation plans is a positive in our view," KBW analyst Brian Kleinhanzl said in a note. "The retail sales practice scandal settlement was announced nearly a year ago, and at this stage we now expect the trickle of new information to slow considerably."

In March, Wells had reached a $110 million settlement with customers who claimed to have been ripped off by fees from phony accounts dating back to 2009. The next month, the bank beefed up the settlement to $142 million as it extended the period of time back to 2002.

“The expansion of this agreement is another important step to make things right for our customers,” Tim Sloan, the bank’s chief executive, said at the time.The new fake-accounts report, however, only goes back to Jan. 1, 2009.
“We apologize to everyone who was harmed,” Sloan said in a statement Thursday.

“What you find is there’s never just one cockroach in the kitchen when you start looking around,” Warren Buffett, Wells Fargo’s largest shareholder, said during a CNBC interview on Wednesday, the day before the report was released.