Wells Fargo & Co. potentially opened 3.5 million accounts in customers' names without those customers' knowledge or consent -- far more than the 2.1 million that were previously identified, according to an independent review, the San Francisco bank said Thursday.
The 3.5-million figure echoes an estimate given in the spring by attorneys in a class-action lawsuit with the bank. They negotiated a settlement based on that figure, so Wells Fargo is not expected to face vast additional payouts.
The bank said Thursday that the analysis by PwC, which it previously announced was coming, looked at a larger time frame than the original review.
The expanded review looked at more than 165 million retail banking accounts opened between January 2009 and September 2016. The initial analysis reviewed 93.5 million current and former customer accounts opened between May 2011 and mid-2015.
On a conference call early Thursday, Wells Fargo Chief Executive Tim Sloan called the new figure "a reminder of the disappointment we caused" to customers and investors.
"To rebuild trust and to build a better Wells Fargo, our first priority is to make things right for our customers," he said in a statement released Thursday. "The completion of this expanded third-party analysis is an important milestone."
Of those 3.5 million potentially unauthorized consumer and small business accounts, about 190,000 accounts incurred fees and charges, up from the 130,000 accounts that had been previously identified.
Wells Fargo said it would provide $2.8 million in further refunds and credits, in addition to the $3.3 million announced after the first review.
The new PwC review analyzed small-business and consumer checking, savings and unsecured credit card and line of credit account data to look for potentially unauthorized accounts.
By using somewhat different methodologies to look at the time frame covered by the first review, the new review found 2.55 million potentially unauthorized accounts, up from the 2.1 million found in the first review, Wells Fargo said in a statement. Plus, by expanding the time frame, the new review found an additional 981,000 potentially unauthorized accounts. Combined, that's 3.5 million.
The new review also found that about 528,000 accounts were potentially enrolled in online bill pay without customers' knowledge or consent. The bank said it would refund $910,000 to those customers who incurred fees or charges.
Wells Fargo's practices were uncovered in a 2013 Los Angeles Times story that found overbearing sales pressure was leading bank employees to create accounts for customers without their knowledge or authorization.
The Los Angeles city attorney sued the bank in 2015, and Wells Fargo agreed Sept. 8, 2016, to pay $185 million to regulators.
This spring, in the process of negotiating a $142-million settlement with the bank, plaintiffs' attorneys told a federal judge in San Francisco that they estimated perhaps 3.5 million unauthorized accounts were created between 2002 and last year.
U.S. District Judge Vince Chhabria has given the deal preliminary approval, but will have to give a final sign-off on the deal later this year before payments to customers are made.
The bank already agreed to increase the payout once before, boosting it to $142 million from $110 million after an internal bank report showed unauthorized accounts had been a problem as long ago as 2002, years earlier than previously reported.
Wells Fargo has acknowledged that unauthorized accounts were created as far back as 2002, but it has not offered to review accounts created that long ago. Sloan said Thursday that the bank's data would not support a review of accounts before 2009, the year it acquired Wachovia.
"That was a big demarcation in terms of data," Sloan said. "The farther you go back, the data is just not as available or of as high quality."
Wells Fargo had known for weeks that its review released Thursday would turn up many more potentially unauthorized accounts than the 2.1 million it identified last year.
Analysts said they had expected the number to grow, and the bank said in a regulatory filing this month that the review "may lead to a significant increase in the identified number of potentially unauthorized accounts."
Last week, Sloan sent a letter to employees warning that there would be a wave of news coverage following the announcement of the new figures.
"The results of our reviews will generate news headlines," Sloan said, "but even as we face this renewed coverage, the best thing we can do is stay focused on fixing problems, making things right for customers, and building a better, stronger Wells Fargo."
Sloan also emphasized in the letter -- as bank representatives have for the past year -- that the number of potentially unauthorized accounts is probably larger than the number of genuinely unauthorized accounts.
The bank identified potentially unauthorized accounts based on how accounts were used. For instance, if a checking account was opened with a minimum deposit, and the deposit was withdrawn soon after, that account would be flagged as potentially unauthorized, Sloan said.
The announcement comes just a few weeks after the bank announced that its chairman, Stephen Sanger, and two other long-serving board members would step down, marking the highest-profile departures since former Chairman and Chief Executive John Stumpf resigned last year.
Scandals surrounding the bank have multiplied in the last year. What started with issues over unauthorized accounts has since grown to include a bevy of additional bad practices -- including unneeded and unwanted insurance policies, bogus mortgage fees and overcharges for small businesses.