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NEWSLETTERS & ALERTS
Wells Fargo CEO to Employees: Brace for More Negative Headlines
[Photo: CEO TImothy Sloan / AmericanBanker.com]
On Monday, Wells Fargo CEO Tim Sloan issued a companywide message to share with bank personnel the steps being taken to correct the bank’s past indiscretions. Sloan notes that the bank will announce "within a few weeks" the completion of an expanded 3rd-party review of its consumer sales scandal.
The results of that review will "generate news headlines," and the "best thing" for the bank to do is to "stay focused on fixing problems."
To date, the bank has paid out more than $5 million to customers, which is in addition to the $142 million class-action settlement for customers that covers concerns about retail sales practices and unauthorized accounts dating back to 2002.
Here are highlights from Sloan’s Q&A companywide message:
Q: How far along are we in our efforts to make things right for our retail bank customers who may have had an unauthorized account opened in their name?
In terms of identifying customers, over the past 10 months we have reached out directly to tens of millions of our consumer and small business customers to let them know we want to address any concerns they have about impacts from unacceptable retail sales practices.
In addition to this direct outreach, we engaged a third party to conduct a detailed analysis of our current and former customers’ accounts to help identify potential harm. The final stage of that analysis is nearly complete.
These efforts, plus others, have resulted in customer refunds or payments to date exceeding $5 million. Additionally, we reached a $142 million class-action settlement for our customers that covers concerns about retail sales practices and unauthorized accounts dating back to 2002.
Q: What’s left to do for Wells Fargo to complete this remediation process?
Within a few weeks, the bank will announce the completion of the expanded retail account analysis, conducted by a 3rd party, for 2009 through 2016. Following completion of this review, fees or charges incurred on potentially unauthorized accounts that were identified will be refunded.
- Also, in the coming weeks, notices about the class-action settlement will be sent to current and former customers – and will provide information on how customers who believe they should be included in this settlement will be able to submit claims.
- We’ve heard customers’ concerns about potential harm to credit scores due to unauthorized accounts, and that’s why an important part of this settlement is remediation to customers for increased borrowing costs due to credit-score impact associated with a potentially unauthorized account.
- Finally, we are working to compile a list of customers who complained that an account was opened without their consent, and those customers will be notified and automatically enrolled in a portion of the class-action settlement.
Q: I saw that we believe the number of customers with potentially unauthorized accounts may increase significantly. Can you tell me more about why this number may grow?
Initially, our analysis focused on accounts that were opened during the timeframe of May 2011 to mid-2015. Now we’re completing an expanded retail account analysis for 2009 through 2016, including additional analysis of the original review period. So as our timeframe almost doubles to an 8-year review period, we can expect our totals for accounts and dollars remediated to grow.
Q: Didn’t we already announce the expanded review of accounts and actions we’re taking? Why are we seeing news stories that suggest we’re conducting a new review of accounts?
You may get the impression from some news stories that the expanded time period for our account review was “new” news. That is not the case. While the final results will be new once received, we made the commitment to conduct this analysis over 10 months ago. The strong public interest in this work is a reflection of the importance we all place on making things right for our customers. In the spirit of transparency, we are proactively communicating all of our rebuilding trust efforts with our stakeholders.
The results of our reviews will generate news headlines, but even as we face this renewed coverage, the best thing we can do is stay focused on fixing problems, making things right for customers, and building a better, stronger Wells Fargo.
Q: Does this complete our review of accounts?
While it does complete the review of accounts by the third party, our remediation efforts go much further. Our outreach to tens of millions of customers has been an important part of our efforts, as is our class-action settlement which covers customer concerns dating back to 2002. Together, this combination of account analysis and remediation, customer outreach, the class-action settlement and resolving customer complaints gives us confidence we will ultimately take care of any customer who believes they were impacted by unacceptable retail sales practices.
Q. What have we done to ensure these sales practice issues don’t happen again?
We have made many changes in our retail bank branches and contact centers to help ensure these issues do not happen in the future:
- Eliminated product sales goals
- Introduced new compensation and performance management programs that emphasize customer experience and risk management
- Changed leadership for the Community Bank
- Eliminated a layer of management in the Community Bank in order to bring senior management closer to our customers
- Strengthened oversight and risk controls
- Began the roll out of transformational changes to processes, coaching and customer interaction to take customer experience to a new level
Q. Once this additional review is complete will we be finished with the sales practices issue and remediation?
We believe our analysis of accounts will be complete. We are going to spend the next several months issuing refunds and account credits to the customers we have just identified through our completed analysis and processing claims submitted in our class-action settlement. And even after that, we will always welcome any customer who comes to us with a concern.
Q: What can you share about new issues that have emerged, such as those involving auto loan customers of Wells Fargo Dealer Services?
As we’ve said before, we’re reviewing all of our operations so we can be confident we have done all that we can do to build a better, stronger Wells Fargo. Recent headlines about other customer issues at Wells Fargo reflect the results of that work – to identify and fix problems, and to be as transparent as possible in the process.