Wells Fargo's 'fake account' scandal is nearly twice as large as we thought - Bring Me The News

Wells Fargo's 'fake account' scandal is nearly twice as large as we thought

The bank says it's even bigger than first reported.

The "fake account" scandal at Wells Fargo appears to have been much bigger than anyone thought. 

According to newly released findings from a third-party investigation, there were actually about 3.5 million "potentially unauthorized consumer and small business accounts" opened as part of a widespread scheme to make sales goals.

That's almost twice the amount that was originally reported last year. 

And the number of customers who suffered fees because of the scheme also went up – by about 60,000 from the initial estimate. 

In a Thursday news release, Wells Fargo said the third-party firm looked at the last eight years of sales practices to reach its findings, widening the scope of the original analysis – which only covered a four-year period.

So what happens next?

"Our first priority is to make things right for our customers," Wells Fargo CEO Tim Sloan said in the release, calling this new analysis an "important milestone."

The company says it's "next steps" include contacting affected customers about how to join a $142 million class-action settlement agreement. In other words, the bank will be letting people know how to collect their share of the money Wells Fargo owes them. 

They've also promised to pay $6.1 million to refund customers for the unauthorized bank and credit card accounts, up from $3.3 million as CNN Money notes

How the scheme worked

It all started with the bank's system of sales incentives and bonuses which, according to federal regulators, "encouraged [salespeople] to sign up existing clients for deposit accounts, credit cards, debit cards and online banking."

But thousands of employees took advantage of this incentive system, opening accounts on behalf of customers without their permission in order to meet sales targets.

They would then move some money from customers' existing accounts into the fraudulent ones, which sometimes led to customers getting hit with overdraft fees, interest charges and late fees.

The Associated Press – which notes the controversy ended up costing the bank a CEO, as well as hundreds of millions in fees and settlements – describes the scandal as "the biggest in Wells Fargo's history."

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