Wells Fargo has continued its work to make things right for customers and has now refunded $3.26 million to customers with account activity that could not be ruled out from having been subject to improper sales conduct.
The company shared on Sept. 8 that it had refunded $2.6 million to roughly 115,000 deposit and credit card accounts that incurred a fee and could not be ruled out as unauthorized. Wells Fargo teams have continued their review and made further refunds to customers, for a new total refund to date of $3.26 million to about 130,000 accounts.
Earlier this month, the company completed the review of consumer and small business unsecured credit cards for the period of May 2011 through September 2015, and line of credit accounts for the period of May 2011 through December 2014, issuing refunds totaling $1,017,980, including interest, for an average refund of $32.41 per customer.
That work, part of Wells Fargo’s commitment to federal regulators under consent orders issued earlier this year, adds to remediation completed in May of consumer and small business checking and savings accounts, which resulted in refunds totaling $2,237,260, for an average of $22.73 per customer, for accounts reviewed for the period of May 2011 through July 2015.
‘Taking action in the customer’s favor’
Mark Lentz, the analytics manager who has led the remediation effort for checking and savings accounts for the Deposit Products Group, said the initial review involved scouring all accounts — more than 82.6 million deposit and 11.6 million credit card and line of credit accounts, or 94.2 million accounts in total.
Work began in the summer of 2015, when Wells Fargo retained a third-party consulting firm, PricewaterhouseCoopers (PwC), to engage in analytics to assess whether fees had been charged to any accounts that may have been subject to improper sales conduct. Deposit accounts were reviewed for atypical activity such as deposits followed quickly by offsetting withdrawals and no further activity. Credit accounts were reviewed to determine whether they were activated and whether there were indications of regular card usage.
Wells Fargo directed PwC to take a conservative approach; if a deposit or credit card account could not be ruled out from being unauthorized, Wells Fargo designated those accounts for further analysis. That analysis and subsequent outreach has resulted in the completed reimbursement to holders of roughly 98,400 deposit accounts and 31,400 unsecured credit card and line of credit accounts.
“It took several months to come up with the methodology and mining of data to help us identify the larger population, and then drill down to those cases where financial harm could have occurred, and take action,” said Lentz, a 16-year company veteran.
Lentz said the remediation continues to follow a three-step track — first identifying potentially unauthorized accounts, then looking for those accounts that were charged fees, and finally issuing reimbursement regardless of whether an account is proven to be unauthorized or not. Likewise, even though only relatively few accounts reached the point where fees or overdraft protection kicked in and affected interest paid, Lentz said his team found the highest interest rate any account received during the period and applied it to every remediation payment.
In addition, a team of more than 100 Wells Fargo employees were involved in making nearly 200,000 calls to customers with inactive credit cards, reaching almost 40,000 of those customers. Many customers appreciated the outreach and told the team they wanted to keep their inactive accounts open and activated their credit cards. The team also helped customers close cards they either didn’t apply for or need anymore. Some customers did not have time to complete the call or wanted to verify the reason for the call before making a decision.
“I feel good about the work and effort to make it right for these particular customers.”
“We quickly created and launched this calling program, provided training to team members, and made sure in our outreach that we were always taking action in the customer’s favor as we went through it, especially since we knew we were calling people who were not expecting to be hearing from us,” said David Marks, who is overseeing the work and leads risk management for the company’s Consumer Lending and Payments, Virtual Solutions and Innovation groups.
Customers are also reaching out to Wells Fargo by calling or visiting a branch following a recent nationwide advertising campaign. While some cases are years old and it can sometimes be challenging to determine exactly what may have happened, bankers are instructed to be overly inclusive in reversing fees.
“I feel good about the work and effort to make it right for these particular customers, and what we’re doing to move away from product sales goals in the retail bank at Wells Fargo,” Lentz added. “Many of the same people working nearly around the clock on this are creating the new way staff in our branches will work to support the move from a sales to service orientation as sales goals are eliminated. This work is something we take very seriously, and we’re working hard to make things right. I know we’ll be an even better company for our customers and team members on the other side.”
More work ahead
In 2017, Wells Fargo will continue its effort to make things right with customers. Review and remediation will be expanded to include the time periods back to Jan. 1, 2011, and forward through Sept. 30, 2016 — the range covered by consent orders from the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB). Additionally, Wells Fargo has voluntarily expanded its review to include 2009 and 2010.
For deposit accounts, Lentz said in the first half of 2017 Wells Fargo plans to identify — and then contact and reimburse shortly thereafter — any deposit customers found to have been impacted during the additional time periods under review.
“Our intention is to continue to be as inclusive as possible.”
A team at Wells Fargo has also been meeting to analyze the data to determine the best way to make things right with customers whose credit scores, and subsequent loans and other credit activity, may have been affected by unauthorized account openings. The goal is to complete that analysis in the first quarter of 2017 and share a remediation plan with regulators. As part of the credit remediation work to date, Wells Fargo has suppressed tradelines (information from creditors about each account) and inquiries from credit reports at the credit rating agencies for customers who said they did not apply for their credit cards.
“Our intention is to continue to be as inclusive as possible in our assessment of additional impact involving credit accounts,” said Marks. “I am proud of the dozens of team members working hard to identify, analyze, and assess customers potentially impacted, and develop remediation plans to make it right for our customers.”
Through email, statement messaging, and postcards, Marks said the company has communicated with more than 40 million consumers and encourages anyone who has concerns to contact Wells Fargo at 1-877-924-8697 or visit a Wells Fargo branch.
In addition, he said, Wells Fargo continues to analyze customer complaints for signs of unauthorized activity and is staffing up to further support that work, while offering mediation services at no charge to customers who believe their situations involving potentially unauthorized accounts were not adequately resolved.
Marks said the remediation outreach is personally important to him because it reflects the commitment of team members who do right by their customers and meet their needs every day.
“It’s important we each take responsibility and accountability.”
“We are a customer-centered company and have been since our founding in 1852, so this work is important to all of us as an opportunity to make things right for our customers because, when we make a mistake, we make it right,” he said.
“It’s important we each take responsibility and accountability. Making sure this remediation effort runs smoothly and that we reach all customers who could have been affected is one way we can all be accountable, help make things right, and support those directly serving our customers.”