Customers avoid new Wells Fargo accounts after sales scandal
KEN SWEET, AP Business Writer
NEW YORK (AP) — Customers are still turning their backs on Wells Fargo after a scandal over sales practices, with the bank saying Friday the number of new checking accounts people opened was down 31 percent in January from a year earlier.
Applications for credit cards were even worse, dropping 47 percent. Branch bankers had 14 percent fewer interactions with customers. Wells Fargo has been releasing monthly reports on these figures since the outcry over its sales practices as a sort of "report card" on how the bank has been dealing with the scandal.
Wells' customers still think less of the bank since the scandal became public as well. Its "customer loyalty" scores, a metric Wells Fargo considered important enough to highlight each quarter, continues to be down several percentage points compared to before the scandal.
There are signs of stabilization, though. While checking and credit cards applications and traffic were all down from a year earlier, they were up or stable compared to December.
The San Francisco-based bank has been under fire since it was discovered that, in order to meet lofty sales goals, employees opened up to 2 million bank and credit card accounts without customer authorization. Federal and California regulators fined Wells Fargo $185 million for the practices, and both the head of Wells' consumer banking division and its CEO were replaced.
Along with reimbursing customers, Wells recently restructured its compensation structure for branch employees focused on incentives tied to how often customers use their accounts, as opposed to how many new accounts are opened.