FILE PHOTO: A Wells Fargo bank sign is pictured in downtown Los Angeles, California, U.S. August 10, 2017. REUTERS/Mike Blake/File Photo
November 3, 2017
By Dan Freed
(Reuters) – Wells Fargo & Co <WFC.N> is facing litigation over previously disclosed sales problems related to its auto lending and mortgage businesses, the bank disclosed in a regulatory filing on Friday.
The lawsuits include two class action cases alleging violations of federal and state consumer fraud laws, as well as claims brought by former employees who said they were fired for raising concerns over problematic sales practices. Wells Fargo disclosed the litigation in its third-quarter financial filing with the U.S. Securities and Exchange Commission.
“The disclosures included in our filing today reflect the company’s continued commitment to transparency. Our top priority is to rebuild trust, and we remain focused on making things right for our customers, team members, community partners and shareholders,” a company spokesman wrote via email.
The third-largest U.S. lender has spent more than a year trying to rebuild its reputation following a sales scandal that led to the departure of its CEO and a companywide overhaul of its business practices. The company says it is continuing to review all its businesses to root out bad practices.
Wells Fargo’s problems came to light several years ago, but did not receive widespread attention until Sept. 9, 2016, when it reached a settlement with three regulators over creating as many as 2.1 million fake accounts as branch employees scrambled to hit sales goals.
The bank later said that number could be as high as 3.5 million, and it has also been turning up other problems, including selling unneeded auto insurance to customers and concerns over fees it charged mortgage customers for locking in interest rates. One lawsuit filed in August over the interest rate lock issue said Wells Fargo managers pressured employees to blame homeowners for delays that resulted in improper charges, sometimes by falsely stating that paperwork was missing.
Wells Fargo shares were down 0.3 percent at $56.29 on Friday afternoon. Its shares are up just over 2 percent year to date, compared with a rise of more than 25 percent for Bank of America Corp <BAC.N> shares and a gain of more than 17 percent for JPMorgan Chase & Co <JPM.N>.
(Reporting by Dan Freed in New York; Editing by Frances Kerry and Matthew Lewis)