Wells Fargo will not conduct a review of fraudulent product sales before 2009, even though an investigation by the firm’s board found a pattern of misconduct dating back well over a decade.
Wells Chief Financial Officer John Shrewsberry said in an interview Thursday that a systematic review of older accounts would not help determine the scope of the problem in earlier years.
“Unless a customer helps you understand the circumstances under which they got something different from what they wanted, or they got something that they didn’t want at all, or they didn’t know that they were getting, there’s nothing that you can do to understand that from looking at data,” he told American Banker.
Wells Fargo vowed last September to conduct a review of retail banking accounts opened in 2009 and 2010, following an already completed review of accounts opened in 2011 or later.
The San Francisco-based bank has been touting its decision to look at accounts from those two additional years as evidence of its commitment to rebuilding customer trust in the wake of revelations that Wells employees opened as many as 2.1 million phony customer accounts.
On Monday, a special committee of Wells Fargo’s board released a 110-page report that traced the roots of the scandal back to the early 2000s.
The report stated that the firm’s retail banking division created a sales integrity task force in 2002. One of the steps that group took was to modify incentive compensation plans in an effort to reduce the promotion of dishonest behavior. Still, an internal company memo from 2004 projected that 223 employees would be fired that year for sales misconduct.
The problems grew over time; 1,327 Wells Fargo employees were fired in 2014. The board’s report made clear that employees had long been gaming the company’s incentive compensation plan by misrepresenting the number of products they sold.
In 2015, Wells hired the consulting firm PricewaterhouseCoopers to conduct a review of accounts opened between 2011 and 2015. Out of more than 94 million customer accounts that were reviewed, 2.1 million were identified as suspicious, though there was no definitive finding that the accounts were unauthorized.
Shrewsberry said Thursday that the sort of data analysis that PwC conducted has significant limitations.
“That analysis doesn’t really tell you whether people got what they wanted or needed. What they say is they couldn’t rule it out. And it’s not very satisfying,” he said.
“What it will show you is people who didn’t use their account," he said. "And there are a lot of reasons people choose not to use a deposit account, for example, in a zero-interest-rate environment.”
Shrewsberry made a commitment to address any concerns that customers raise regarding accounts that were opened before 2009.
“If any customer from any point in time came in and said they got something that they didn’t want or need from Wells Fargo, regardless of whether it was 2009, 2002, or any point before that, then we would do the work to understand it and make it right for the customer,” he said. “There’s no time bound on that commitment.”
Wells Fargo has yet to complete its review of accounts opened in 2009 and 2010, according to spokesman Ancel Martinez. He said that he does not know whether the results of that review will be made public.