Wells Fargo and its U.S. bank regulator discussed complaints of high-pressure sales tactics as early as 2010 but officials took no action for years, according to a regulator's review of the scandal.
Bank examiners "failed to follow-up on significant complaint management and sales practices issues," according to an unpublished, internal review by the Office of the Comptroller of the Currency that was seen by Reuters.
The report ends a seven-month evaluation of how the OCC failed to halt a scandal in which thousands of Wells Fargo employees created as many as 2 million customer accounts without their consent.
The Wells Fargo board of directors was alerted in 2005 that bank tellers were being fired because they created phantom accounts, according to the report.
Five years later, Wells Fargo and bank examiners met to discuss what was motivating bank tellers to continue to create accounts without customer authorization.
There were 700 cases of whistleblower complaints from Wells Fargo employees at that time, the report said.
In that January 2010 meeting, Carrie Tolstedt, the former head of community banking, credited Wells Fargo's internal controls for catching the fraud.
"The primary reason for the high number of complaints is that the culture encourages valid complaints which are then investigated and appropriately addressed," the report said of Tolstedt's explanation.
The OCC review recommends nine changes to internal process to better detect and address such scandals. Whistleblowers will have a more direct line to senior officials under one change, the document said.