Wells Fargo Uncovers 1.4 Million More Fake Accounts
AILSA CHANG, HOST:
The financial world was shaken in 2016 when it became clear that Wells Fargo opened millions of accounts with fake information or without customers' permission. Now it turns out that they had underestimated just how many fake accounts were created. We should mention that Wells Fargo has been a sponsor of NPR programming. Still, it is a bank that NPR has reported on heavily. NPR's Chris Arnold has done a lot of that reporting, and he joins us now.
CHRIS ARNOLD, BYLINE: Hi, Ailsa.
CHANG: OK. So let's just remind everyone that Wells Fargo has been grappling with a string of bad news for a year now. And now this - a lot more fake accounts have been discovered. What is this latest story?
ARNOLD: Right. So this goes back, like you said, to the scandal where there was intense sales pressure at the bank. We talked to former employees who just said, you know, the screws would be put to them in a back room if they didn't sell 20 credit cards or checking accounts on this particular day. And as a result of that, it appears that, you know, millions of fraudulent credit card and checking accounts were created. And back last year when the scandal broke, it seemed to us and other reporting outlets, too, that the bank was looking at too narrow a time window - that they weren't broadening the lens wide enough because we had - folks we were talking had said - look, this was going on way back in 2009, you know...
ARNOLD: ...Years before the bank was really looking at it. So now the bank has gone back. They've doubled the time period, basically, that they're looking at, going back to January of 2009. And maybe not surprisingly, they found nearly twice as many of these fraudulent accounts.
CHANG: Twice. It's like Wells Fargo cannot find a breather. I mean, can you just step back for a second and take us through the other scandals the bank has been mired in recently?
ARNOLD: Well, there are a bunch. One that's dramatic to focus on that just happened earlier this summer, when Wells Fargo was trying to emerge from this cloud, was it turned out that the company had forced, like, half a million customers, it looks like, into unneeded auto insurance when they made auto loans to them. And an internal review found that 20,000 of those customers may have defaulted on their car loans and had their vehicles actually repossessed. So these are people who...
CHANG: Oh, my...
ARNOLD: ...Didn't do anything wrong. And Wells had - we actually did a story where it was like - this guy's like, somebody stole my car. And we said, well, somebody did make off with it improperly. But it wasn't exactly stolen. It was Wells Fargo Bank, you know, who repossessed it improperly.
CHANG: Right. Wow.
ARNOLD: So I mean, you know, there just has been a string of these things that have been very embarrassing for Wells Fargo.
CHANG: What about the Wells Fargo workers? You reported on how some of them who blew the whistle on the bank were retaliated against. What has the bank done about that?
ARNOLD: Right. So this involved - we spoke to a lot of former workers at Wells Fargo in five different cities around the country, including San Francisco, where the headquarters branch is. And they all described - the folks we talked to - saying, look - there was fraud all over the office. I called the ethics line. I tried to report it. And for my troubles, I got fired. And not only was I fired, my permanent record in the financial industry got a - you know, a negative mark on it basically, from the bank. And that's prevented me from getting another job.
And it was just really bad. This sparked a Senate inquiry. The bank said it has been looking into this, it's disturbed by this. But it hasn't actually come out with any solution to it so far.
CHANG: OK. What does Wells Fargo have to say about this latest development - that there's nearly twice as many fraudulent accounts as they originally thought?
ARNOLD: The quick statement from them is they're apologizing to everybody who was harmed by these unacceptable sales practices. Also, we should say, I visited their offices, where the bank is setting up a whole new investigations unit to try to make sure that these scandals don't keep happening.
CHANG: All right. That's NPR's Chris Arnold. Thank you very much, Chris.
ARNOLD: Thanks, Ailsa. Transcript provided by NPR, Copyright NPR.