Wells Fargo & Company (NYSE: WFC) CEO Tim Sloan today sent
the following companywide message to address team member questions
and provide updates on the steps the company is taking to make
things right for customers and build a better Wells Fargo. Sloan’s
message to team members reads as follows:
“In my visits with team members across the country, I continue
to admire the resilience demonstrated by our team in a very
challenging year and the care you show for our customers. At each
stop, I’ve received a wide range of questions about the steps we’re
taking to rebuild trust and build a better Wells Fargo. Many have
been asking about our progress in making things right for customers
who may have been harmed by unacceptable retail sales practices
that occurred in our Community Bank.
Today, I want to share with you my answers to those
questions.
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?
Thanks to the hard work of many of you, we’re closer to the
completion of these efforts. You’ve succeeded at staying focused on
the goal of making things right for our customers, and our progress
has been significant.
Let’s review our progress in two key areas: identifying those
who may have experienced financial harm and remediating that
harm.
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.
We also established a dedicated hotline – 1-877-924-8697 – and
an online resource center at www.wellsfargo.com/commitment for
up-to-date information on this issue.
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.
A principle guiding our work to identify potential harm was to
err on the side of our customers. This is important because the
analysis is data-driven and looks at usage patterns in accounts.
Since usage patterns of some authorized accounts opened with a
customer’s consent can be similar to some unauthorized accounts,
the analysis could not definitively determine if proper
authorization occurred. That’s why we decided the analysis would
identify potentially unauthorized accounts in order to err
on the side of the customer.
These efforts, plus others, have resulted in customer refunds or
payments to date exceeding $5 million. This reflects your
responsiveness to our customers’ concerns, which has included an
enhanced resolution process that expedites customer inquiries about
unauthorized accounts. We also have offered mediation services to
our customers at no cost to them.
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. The settlement,
which has received preliminary approval from the court, also will
provide remediation to customers who experienced harm to their
credit ratings. As a reminder, a timeline of our progress to date
has been posted on Wells Fargo Stories.
Q: What’s left to do for Wells Fargo to complete this
remediation process?
The next step will occur within a few weeks. That’s when we’ll
announce the completion of the expanded retail account analysis,
conducted by a third party, for 2009 through 2016. Again, this
analysis examined account usage patterns and is constructed to err
on the side of the customer in determining which accounts are
included as potentially unauthorized.
Following completion of this review, fees or charges incurred on
potentially unauthorized accounts that were identified will be
refunded. These customers will receive letters informing them that
they are receiving either a refund check from Wells Fargo or a
credit to their existing account.
Also, in the coming weeks, notices about the class-action
settlement will be sent to current and former customers. The
notices will provide information about the process for making
claims, and customers who believe they should be included in this
settlement will be able to submit claims under this broad and
far-reaching settlement agreement. 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.
Our retail banking account analysis, the class-action
settlement, broad customer outreach and resolution of customer
complaints are all very meaningful milestones and will help us
fulfill our commitment to make things right for customers harmed by
improper sales practices in our Community Bank.
Q: I have seen the phrase “potentially unauthorized” accounts
-- what does “potentially unauthorized” mean?
It’s important for everyone to understand this description, as
it has been an ongoing source of confusion for our stakeholders,
including our team members.
“Potentially unauthorized” does not mean we are certain the account is
unauthorized. The phrase “potentially unauthorized” is how we
describe the total number of accounts that a third-party analysis
identified as showing patterns that could indicate a lack of
authorization – for instance, if a credit card wasn’t activated and
used. From this number, we identify those accounts that incurred
fees and other costs, and issue refunds and account credits to make
things right for our customers.
Since our analysis was inclusive and erred on the side of the
customer, this group most likely includes a population of accounts
that were authorized by our customers. As I said before, we looked
at patterns that sometimes, but not always, indicate a lack of
authorization. However, we would rather be inclusive and refund the
fees on accounts that were properly authorized than miss accounts
that were not authorized.
What do we mean by err on the side of customers?
It means as we did our work to make things right for our
customers, we took action in our customer’s favor, such as
refunding fees even when the third-party data analysis could not
definitively tell us whether an account was authorized by a
customer or not.
While it is likely through the review process we will be
refunding fees and charges on accounts that were properly
authorized, it is the right thing to do. We have confidence that
we’ve cast a wide net to reach customers who may have been harmed
by potentially unauthorized accounts.
Let me share some examples:
- Credit cards were included in
the potentially unauthorized population if not activated, even
though it is not unusual for customers to obtain a credit card as a
safety net. For example, most customers who received a credit card
in the mail and didn’t call to activate the card are included in
this group. In fact, unused or inactive cards were included as
potentially unauthorized in our original analysis that were later
activated by our customers.
- Checking and savings accounts
that were considered potentially unauthorized included those that
were opened with a minimum deposit, then had a withdrawal of the
same amount, and no further usage within certain timeframes. These
accounts were included, even though it is not uncommon for many of
our customers to open an account with a minimum deposit and later
elect to withdraw funds or not use the account.
- Other credit accounts, such as
credit lines, were included in our analysis based on several
factors including if they were not used, even though we know that
people often obtain credit lines “just in case” and don’t use
them.
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 eight-year review period, we can
expect our totals for accounts and dollars remediated to grow.
Again, in our effort to make things right, we want to reach
every customer we can. Identifying potentially unauthorized
accounts is one of the ways we accomplish that goal.
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.
We continue to encourage any customer to contact us if they
believe they were harmed by an improper sales practice, regardless
of when it happened, so we can work with them to make it right.
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.
Finally, the other work that will continue is making sure that
all of our stakeholders – customers, investors, community and
government leaders, regulators, and you, our team members – are
informed of our efforts. This is an important part of our
rebuilding trust commitment.
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.
Q: What can team members do to help take care of
customers?
First, encourage any customer who has concerns to call or visit
us. And second, share the information I’m providing in this Team
News to help the communities we serve understand all that we are
doing to make things right for our customers.
While we have more to do, I’m confident our reviews have been
thorough and we’re taking the steps necessary to transform our
operations. What’s more, we are demonstrating that if customers
encounter a challenge working with us today, we are taking action
to address their concerns.
I look forward to reporting more progress in the months
ahead.”
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
insurance, investments, mortgage, and consumer and commercial
finance through more than 8,500 locations, 13,000 ATMs, the
internet (wellsfargo.com) and mobile banking, and has offices in 42
countries and territories to support customers who conduct business
in the global economy. With approximately 271,000 team members,
Wells Fargo serves one in three households in the United States.
Wells Fargo & Company was ranked No. 25 on Fortune’s 2017
rankings of America’s largest corporations. News, insights and
perspectives from Wells Fargo are also available at Wells Fargo
Stories.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our
future financial performance and business. Because forward-looking
statements are based on our current expectations and assumptions
regarding the future, they are subject to inherent risks and
uncertainties. Do not unduly rely on forward-looking statements as
actual results could differ materially from expectations.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date. For information about factors that
could cause actual results to differ materially from our
expectations, refer to our reports filed with the Securities and
Exchange Commission, including the discussion under “Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31,
2016, as filed with the Securities and Exchange Commission and
available on its website at www.sec.gov.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170822006126/en/
Media contactsJim Seitz,
612-316-2447Jim.Seitz@wellsfargo.comMary Eshet,
704-383-7777Mary.eshet@wellsfargo.comorInvestor
RelationsTanya Quinn,
415-396-7495Tanya.Quinn@wellsfargo.com
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