SMBs Snared In Wells Sham Account Fiasco

Thousands of small business accounts were impacted by improper sales activity at Wells Fargo — indicating that the scandal may go a bit deeper than had been originally thought.

Does the Wells Fargo scandal go a bit deeper than had been originally thought — or disclosed?

The facts that came to light this week seem to suggest thousands of small business owners were ensnared in the improper sales tactics at the financial giant that made up sham accounts in order to meet sales goals, creating those accounts without holders’ knowledge.

Reuters reported that, in tandem with a letter written by Sen. David Vitter (R-LA), who serves on the Senate’s banking committee and small business committee, Congress is looking for more detail on just how widespread the fraud may have been. Vitter said he wanted a “full accounting” of just who was affected and when. The letter was addressed to Wells Fargo CEO John Stumpf, Reuters reported. The senator said that discussions between congressional staff members and the bank have indicated that small businesses — as many as 10,000 of them, according to an unnamed source cited by the newswire — were victimized by the fraud.

The new indications that the small business accounts were also hurt by Wells Fargo’s practices come weeks after the disclosure that 2 million accounts had been opened at the bank without knowledge or permission. Wells Fargo agreed to pay a $190 million settlement over the practices and also fired 5,300 employees.

Wells, for its part, said via a spokeswoman: “While the vast majority of accounts in the settlement were consumer accounts, to the extent there were small business accounts included, all were previously reported in the total number of potentially impacted accounts … The impacted accounts, including small business, were part of our retail bank business.” And yet, a Consumer Financial Protection Board spokesman countered that claim, stating that the 2 million accounts previously disclosed by the bank did not include small business accounts.

Reuters stated that it spoke to other sources, including a former Wells employee and a lawyer representing former employees, obtaining descriptions of allegedly “abusive sales practices” that affected several business accounts. The Wells employee described being pushed to sell products in “packages of three,” such as savings accounts, credit card accounts and payroll — whether needed or not.