Wells Fargo
Wells Fargo spokeswoman Catherine Pulley stated, "We are reviewing add-on products sold to consumers by the Bank or its service providers and if issues are found during this review, we will make things right with customers in the form of refunds or remediation. We are working with our regulators on the ongoing review." Wells Fargo stopped selling these products last year. The products were often attached to various financial accounts and could include anything such as identity theft prevention, debt-protection assistance, pet insurance, and legal services.
Wells Fargo CEO Tim Sloan continues facing the issue of rising costs from having to clean up the bank's messes. The lender booked over $300 million of expenses in Q2 for refunding clients of two of their units. The bank also agreed to a separate $1 billion settlement to cover their auto-lending and mortgage units. This scandal has not surprisingly cost the company a lot and has cut out a considerable amount from their bottom line. Although it is a large and established bank, their legal problems have caused serious trouble. Recently, the bank announced that operating losses increased 77% in the last quarter and profits decreased 12%. The bank also saw average deposits decrease 2%, caused by a decline in business from financial institutions. Wells Fargo blamed this on Fed penalties prohibiting the bank from growing its balance sheet. Lending also fell 1% from the first quarter and they suffered $619 million in operating losses for "previously disclosed matters."
- https://www.cnbc.com/2018/07/19/wells-fargo-reportedly-refunding-hundreds-of-thousands-customers-for.html
- https://www.bloomberg.com/news/articles/2018-07-19/wells-fargo-is-refunding-some-customers-for-add-on-product-fees
- https://www.mpamag.com/news/wells-fargo-refunding-tens-of-millions-for-unnecessary-addons-106784.aspx
- https://www.mpamag.com/news/wells-fargos-scandals-take-bite-out-of-bottom-line-105983.aspx