Wells Fargo: Nearly 80K potentially unauthorized accounts opened in Pa.

Joel Berg//October 3, 2016

Wells Fargo: Nearly 80K potentially unauthorized accounts opened in Pa.

Joel Berg//October 3, 2016

Of those accounts, 2,621 incurred fees, according to a Wells Fargo spokesman, Kevin Friedlander. Affected customers have been paid an average refund of $25 per unauthorized account.

“Wells Fargo apologizes and takes full responsibility for incidents in which any customer received a product they did not want or value,” Friedlander wrote in an email. “Even one unauthorized account is one too many. We are committed to the best interests of our customers and to restoring their trust so we can continue to help them succeed financially.”

Last month, the San Francisco-based bank agreed to pay a $185 million fine for allegedly opening more than 2 million unauthorized accounts to meet sales goals. That fine included $100 million to the Consumer Finance Protection Bureau, the largest payment in the agency’s five-year history. Some 5,300 employees were fired amid those revelations.

In Pennsylvania, the unauthorized accounts potentially numbered up to 79,916, according to figures provided by Wells Fargo. The number was first cited by Wells Fargo John CEO Stumpf while he was being questioned last week before the House Financial Services Committee of the U.S. Congress.

Wells Fargo holds the second-biggest share of deposits in Pennsylvania, trailing only Pittsburgh-based PNC Bank, according to figures from the Federal Deposit Insurance Corp. Wells Fargo, which has 273 branches in Pennsylvania, has a market share of 10.07 percent as of the end of June.

Wells Fargo has 36 branches in Cumberland, Dauphin, Lancaster, Lebanon and York counties, and a market share of 9.56 percent, which gives it the fifth-biggest share in the region as of the end of June, according to the FDIC.

The Wells Fargo board, meanwhile, determined that Stumpf will give up $41 million in unvested equity awards and his salary during the investigation, widely considered one of the harshest punishments against the head of a financial institution. Wells Fargo’s former head of community banking, Carrie Tolstedt, who allegedly oversaw the banking practices, will also forfeit $19 million in unvested equity awards.

Wells Fargo has announced that it is eliminating product sales goals in retail banking effective Oct. 1.

Concerns have arisen nationally over financial incentives in banking and the practice known as cross-selling. The idea is to sell more products to existing customers.

Local bankers contacted by CPBJ declined to comment about Wells Fargo. But they said their institutions do not offer financial incentives to hit product sales goals.

“From time to time we will have promotions within our branches that we will rally the teams to support, but it is generally in non-monetary ways that we reward them,” said Kelly Neiderer, chief retail officer at Mid Penn Bank, based in Millersburg, Dauphin County.

The bank monitors what products customers are choosing, she said, but the goal is to understand customer preferences, not to set targets for staff members.

Mid Penn is more interested in factors like accuracy and customer service, Neiderer said. “We don’t base our employment here for our retail staff on widget sales.”

The (Baltimore) Daily Record, a BridgeTower Media publication, continued to this report.