The bank is setting aside $285 million to reimburse overcharged clients
Wells Fargo has revealed that it overcharged still more customers.
On Friday, the bank announced that it is setting aside $285 million to refund foreign-exchange and wealth-management clients who were overcharged, according to a CNN report.
That’s in addition to the money the bank is already paying out over its fake-accounts scandal and to customers it gave unnecessary car insurance and mortgage borrowers who were charged improper fees.
The bank’s parade of scandals has taken a bite out of its bottom line. The company said Friday that its profit dropped 12% during the second quarter. Meanwhile, its operating losses spiked 77% in Q2, and overall expenses were up 3%.
In the newest revelation, Wells Fargo said that a third-party investigation into its foreign-exchange business found that it may need to refund $171 million to clients, including $31 million in refunds where the customer “received pricing inconsistent” with the bank’s commitments, CNN reported.
The banking giant had previously disclosed that government agencies had inquired about its foreign-exchange business. Last fall, The Wall Street Journal reported that federal prosecutors were investigating the business.
In addition to the money set aside for its foreign-exchange clients, Wells Fargo earmarked $114 million to rebate fiduciary and custody customers in its wealth-management business who were charged “incorrect fees” over the last seven years, CNN reported.
The bank also cautioned that further review may reveal that it owes more refunds.
“We’ve accounted for what we know so far,” chief financial officer John Shrewsberry told reporters Friday. However, Shrewsberry said that it was likely that the bank would have “a little more to do” once the review is complete.
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