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8-K - 8-K - WELLS FARGO & COMPANY/MN | wfcform8k08312017.htm |
Wells Fargo Reports Completion of Expanded Third-Party Review
of Retail Banking Accounts, Paving Way to Complete Remediation
Effort
SAN FRANCISCO, August 31, 2017 – Wells Fargo & Company (NYSE: WFC) today announced the
completion of its previously announced expanded third-party review of retail banking accounts dating
back to the beginning of 2009. Combined with a recent class action settlement and ongoing broad
customer outreach and complaint resolution, the completion of the analysis further paves the way for
making things right for Wells Fargo customers who may have been harmed by unacceptable retail
sales practices.
“We apologize to everyone who was harmed by unacceptable sales practices that occurred in our
retail bank,” said Wells Fargo CEO Tim Sloan. “To rebuild trust and to build a better Wells Fargo,
our first priority is to make things right for our customers, and the completion of this expanded
third-party analysis is an important milestone. Through this expanded review, as well as the class
action settlement, free mediation services, and ongoing outreach and complaint resolution, we’ve
cast a wide net to reach customers and address their remaining concerns. Our commitment has
never been stronger to build a better bank for our customers, team members, shareholders and
communities.”
Erring on the Side of Customers
To conduct the review of retail bank accounts, Wells Fargo engaged a third-party firm that
developed a data analysis methodology that errs on the side of customers. The account review
analyzed consumer and small business checking, savings, and unsecured credit card and line of
credit account data to identify potentially unauthorized accounts (see Aug. 22 news release for
details on the methodology). The analysis was data-driven and looked at account usage patterns.
Since usage patterns of some authorized accounts opened with a customer’s consent can be similar
to some unauthorized accounts, it is likely that some properly authorized accounts were included in
the population identified as unauthorized accounts.
Media contacts Investor Relations
Jim Seitz Mary Eshet Jim Rowe
612-316-2447
Jim.Seitz@wellsfargo.com
704-383-7777
Mary.eshet@wellsfargo.com
415-396-8216
Jim.Rowe@wellsfargo.com
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Results of Expanded Data Analysis
The original account analysis reviewed 93.5 million current and former customer accounts opened in
an approximately four and half year time period – from May 2011 through mid-2015 – and identified
approximately 2.1 million potentially unauthorized accounts. The expanded analysis reviewed more
than 165 million retail banking accounts opened over a nearly eight-year period – from January 2009
through September 2016 – and identified a new total of approximately 3.5 million potentially
unauthorized consumer and small business accounts. The 3.5 million potentially unauthorized
accounts total is composed of the following:
The original time period, which included refinements to the practices and methodologies
previously used by the third-party to determine potentially unauthorized accounts:
2.55 million accounts identified as potentially unauthorized; and
The additional periods back to January 2009 and forward to September 2016: 981,000
accounts identified as potentially unauthorized.
In connection with these 3.5 million potentially unauthorized accounts, approximately 190,000
accounts incurred fees and charges, up from 130,000 previously identified accounts that incurred fees
and charges, and Wells Fargo will provide a total of $2.8 million in additional refunds and credits on
top of the $3.3 million previously refunded as a result of the original account review.
Online Bill Pay Review
In addition, the expanded analysis included a review of online bill pay services, as required by the
Sept. 8, 2016, consent orders. During the almost eight-year review period, the analysis identified
approximately 528,000 potentially unauthorized online bill pay enrollments and Wells Fargo will
refund $910,000 to customers who incurred fees or charges. The analysis identified, as potentially
unauthorized, accounts with only one minimal payment and no further use of the service. Some
customers may have made an authorized introductory payment and then elected not to use the
service. Therefore, the analysis did not definitively identify whether an enrollment was authorized by
a customer or not, and properly authorized enrollments are likely part of this total. Wells Fargo will
issue refunds for all enrollments the review identified as potentially unauthorized.
Customer Remediation Update
In addition to the refunds resulting from the third-party account review, Wells Fargo has provided
more than $3.7 million in refunds and credits to customers for complaints and mediation claims from
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Sept. 8, 2016, through July 31, 2017. Customers also may receive compensation under the recent
$142 million class-action settlement for claims dating back to 2002. After plaintiffs’ attorneys’ fees
and costs of administration, the class-action settlement will provide reimbursement of fees not
already paid and compensation for increased borrowing costs due to credit-score impact associated
with a potentially unauthorized account. Remaining funds will be distributed to the participants in
the class on a per account basis.
Following is a summary of Wells Fargo’s remediation actions:
Summary of Customer Remediation Actions (paid or identified to date)
Third-party account
review (January 2009-
September 2016)
$7.0 million in refunds of fees and interest (paid or to
be paid)
Wells Fargo customer
outreach – complaints
process/mediation (Sept. 8,
2016 – July 31, 2017)
$3.7 million in compensation paid (through July 2017)
Class-action settlement
(May 1, 2002 – April 20, 2017)
$142 million for customer remediation and settlement
expenses
“We want to ensure we make things right for each and every customer who may have concerns
about the impact of unacceptable sales practices” said Mary Mack, head of Community Banking.
“Over the past year, we have made numerous improvements in our retail bank, such as eliminating
product sales goals for retail bankers in bank branches and call centers and increasing oversight
and controls – changes that give us confidence that our team members are focused on delivering
exceptional service and advice to our customers.”
Next Steps: Making Things Right for our Customers
In the coming weeks, Wells Fargo will be taking significant steps to compensate its retail and small
business customers who may have been harmed or impacted by unacceptable retail sales practices
within the company’s retail bank. As Wells Fargo makes things right with customers, these steps
also will help the company fulfill its remediation commitments under the sales practices consent
orders with the Consumer Financial Protection Bureau and the Office of the Comptroller of the
Currency.
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These steps include:
Beginning communications associated with the company’s $142 million class action
settlement agreement (Jabbari v. Wells Fargo) covering all persons who claim that Wells
Fargo opened, without their consent, a consumer or small business checking or savings
account or an unsecured credit card or line of credit, and customers who enrolled in certain
identity theft protection services, between May 1, 2002 and April 20, 2017. Over the next
two months, both Wells Fargo and the court-appointed claims administrator will be
sending communications about how to join the class to current and former Wells Fargo
customers (details are available online at WFSettlement.com).
Continuing to work with any customers who contact us with concerns about harm that
could have been caused to their credit score by an account opened without their
authorization and correcting records for these customers with the credit bureaus.
Customers who inform us of an account they did not authorize that led to increased
borrowing costs due to credit-score impact will be eligible for compensation from the class
action settlement (Jabbari v. Wells Fargo, detailed above).
Compiling a list of customers who complained to Wells Fargo about an unauthorized
account that was opened without their consent. Those customers will be notified by both
Wells Fargo and the court-appointed claims administrator and automatically enrolled in a
portion of the class-action settlement.
Continuing to offer free mediation services to customers if the company is unable to resolve
an issue related to an unauthorized account directly with the customer. Wells Fargo will
continue to offer this service to customers who are not satisfied with any of the outcomes
from the steps above.
“As always, we welcome – and encourage – customers with questions or concerns to visit a branch
or call our contact center,” said Sloan. “There is nothing more important to me and to Wells Fargo
than rebuilding trust with our customers and helping them succeed financially. We are working
hard to ensure this never happens again and to build a better bank for the future.”
For customers who believe they had an unauthorized account or service opened in their name,
regardless of when the issue occurred, Wells Fargo has a dedicated hotline: 1-877-924-8697.
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About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services
company with $1.9 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs
and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells
Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance
through more than 8,500 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile
banking, and has offices in 42 countries and territories to support customers who conduct business
in the global economy. With approximately 271,000 team members, Wells Fargo serves one in
three households in the United States. Wells Fargo & Company was ranked No. 25 on Fortune’s
2017 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo
are also available at Wells Fargo Stories.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our future financial performance and
business. Because forward-looking statements are based on our current expectations and
assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not
unduly rely on forward-looking statements as actual results could differ materially from
expectations. Forward-looking statements speak only as of the date made, and we do not
undertake to update them to reflect changes or events that occur after that date. For information
about factors that could cause actual results to differ materially from our expectations, refer to our
reports filed with the Securities and Exchange Commission, including the discussion under “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with
the Securities and Exchange Commission and available on its website at www.sec.gov.
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