Wells Fargo & Company WFC might refund fees wrongly charged to some customers on account of confusion about the types of transactions counted toward the minimum usage of debit cards that would have waived service fees.
However, the bank considers guidelines, on how to get a waiver through debit card usage, to be confusing to customers. It is currently reviewing past disclosures to consumers, per its quarterly filing.
Post 2016 sales scandal disclosure, Wells Fargo has been committed on rebuilding trust and thus undertook numerous actions focused on identifying potential financial harm and customer remediation.
The company stated in the filing that it is involved in early talks with the U.S. Justice Department and SEC to complete investigations related to sales practices with “no assurance as to the outcome,” after announcing the negotiations in February.
It is reviewing practices concerning the origination, servicing and collection of consumer automobile loans, including matters related to certain insurance products. Further, the bank is in process to provide remediation to affected customers for policies placed between Oct 15, 2005 and Sep 30, 2016.
Also, Wells Fargo is conducting a review of fee calculations within certain fiduciary and custody accounts in its investment and fiduciary services business, which is part of the wealth management business. It has identified certain instances of incorrect fees being applied to certain assets and accounts, resulting in both overcharges and undercharges to customers.
In the same filing, Wells Fargo disclosed that it has raised the high end of potential losses in excess of the company’s accrual to $3.1 billion compared with $2.7 billion as of Dec 31, 2018.
Wells Fargo’s efforts to control costs through consolidating its operations, processes’ improvement through technology and outsourcing of certain operations, seems impressive. Further, sudden exit of CEO Tim Sloan and the board’s decision to hand over the reins of the bank to someone from outside might help clear its name from past scandals.
Shares of Wells Fargo have lost 9.1% over the past six months against 2.8% growth recorded by the industry.
Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Citigroup Inc. C has witnessed 2.4% upward estimate revision over the past 30 days. Also, the company’s shares have risen nearly 6% in the past six months. It has a Zacks Rank #2 (Buy) at present.
JPMorgan Chase’s JPM estimates have been revised 3.3% upward for current-year earnings over the past 30 days. Also, the company’s shares have risen nearly 6% in the past six months. It carries a Zacks Rank #2.
The Zacks Consensus Estimate for Community Bank System’s CBU current-year earnings has been revised 1.9% upward over the past 60 days. Also, the company’s shares have risen nearly 6% in the past six months. It currently carries a Zacks Rank of 2.
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