In late 2016, it was revealed that Wells Fargo employees had established millions of “fake accounts,” with the goals of meeting management-established quotas and getting commissions. These fake accounts were set up without the customers’ knowledge; employees would establish the accounts, debit cards, or other financial products, transferring the money from employee accounts to pay the fees.
According to American Banker, Wells Fargo has just estimated that employees opened a total of 3.5 million unauthorized accounts over eight years. That’s a 67 percent increase over the company’s original estimate of 2.1 million. American Banker reported that the increase came about because the bank expanded the time period from four to eight years, and discovered the additional 1.4 million accounts.
Wells Fargo gave $3.3 million back to consumers who were affected by the scandal. They have announced they will refund an additional $2.8 million as a result of the newly revealed accounts. The bank also announced it reformed its payment structure, to avoid the damaging “quotas” in the future. After paying out refunds, the bank also agreed to pay $142 million in a class action lawsuit.