Wells Fargo Reviews More Products for Financial Harm to Customers

Wells Fargo & Co. is examining whether it caused unnecessary financial harm to customers through residential mortgage fees, frozen deposit accounts or “add-on” products like identity theft protection, the bank said in a U.S. regulatory filing on Friday. The disclosures signal that the bank’s problematic sales practices go further than investors and analysts had expected after Wells Fargo reached a settlement with regulators in September over unauthorized customer accounts. Wells Fargo’s shares[1] dropped 1 percent to £52.87 in afternoon trading.

“We were surprised that this wasn’t disclosed when the original sales practices were disclosed,” said Kevin Barker, analyst at Piper Jaffray. “Given the scope of the issues out there, it seems like this is a bigger deal than we had originally thought.”

Wells, the third-largest U.S. bank by assets, discovered the new issues as part of a review by a third-party consultant as required by the regulatory settlement.

It expects that review to be complete in the third quarter.

References

  1. ^ Wells Fargo’s shares (www.newsmax.com)

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