Wells Fargo is still facing heat from last year’s fraudulent accounts scandal, as lawsuits against the financial firm are reportedly piling up.
In the financial company’s quarterly filing released late last week, Wells reported that it expects that losses from legal actions could exceed provisions by an estimated $2 billion, up from the $1.8 billion the company reported a few months back.
The suits, brought against the company by investors, employees and customers, are related to the revelation that Wells Employees had created as many as 2.1 million fraudulent cards and accounts over several years without consumers’ consent.
The bank paid out $185 million in fines and penalties to settle the issue in September but continues to face legal action.
“The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible,” the company wrote in its report. “It is also inherently difficult to estimate the amount of any loss, and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established liability or the range of reasonably possible loss.”
Recently, Wells Fargo Chief Executive Tim Sloan denied the company had specifically targeted undocumented workers during the years employees were creating fake customer accounts, but according to a former Wells Fargo employee, Yesenia Guitron, that is exactly what Wells Fargo did.
According to a report in American Banker, Guitron, who worked for Wells Fargo in St. Helena, Calif., from 2008 to 2010, said in several interviews the pressure-filled sales environment led bankers in her branch to go after undocumented vineyard workers to meet the daily quota of opening eight new accounts each day.
Last month, Wells Fargo clawed back an additional $75 million in executive pay from two former high-level employees implicated in the scandal.