Small Businesses Also Included in Wells Fargo Scandal

Photo courtesy of Mike Mozart.

Louisiana’s Republican Senator David Vitter sent a letter on September 29, which was viewed by Reuters, to John Stumpf, chief executive of Wells Fargo, asking him to provide a “full accounting” of customers affected by their improper sales practices.

As a member of the US Senate’s banking committee and the head of its small business committee, Vitter wrote that discussions between congressional staffers and Wells Fargo representatives “have indicated that the fraudulent activity of your employees was not limited to Wells Fargo’s consumer banking operations. Thousands of small business owners were impacted by this fraud.”

Investigations by Vitter’s committee can point to Wells Fargo’s fraudulent practices being directed to about 10,000 small businesses in addition to the possible 2 million consumer accounts which Wells Fargo opened fraudulently. This new revelation comes about one month after the bank reached a settlement of $190 million with its customers for opening accounts for them without their knowledge.

The news of the bank’s behavior caused a sensation among consumers, resulting in the firing of about 5,300 employees for opening up accounts improperly.

Stumpf appeared before two congressional committees, and other oversite governmental authorities such as the Justice and Labor Departments, which led to investigations into the bank’s sales practices.

“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,” said Wells Fargo spokeswoman Jennifer Langan. “As stated earlier, Wells Fargo has already refunded 115,000 accounts. The impacted accounts, including Small Business, were part of our Retail Bank business.”

But a Consumer Financial Protection Board spokesman said Langan’s words were incorrect. The two million accounts in the settlement did not included any small business accounts.

Amelia Jacobs

About Amelia Jacobs

Amelia Jacobs began her career in business following a surprisingly successful trip to China. Having visited the region as a tourist, she returned to America as an import-exporter. Today, Jacobs runs a thriving import-export company, splitting her time between Chicago and Shanghai. Contact Amelia at amelia[at]businessdistrict.com