Wells Fargo & Company agreed to pay $575 million to settle a multistate investigation into its misconduct involving its sales practices, mortgage-rate lock fees, and Collateral Protection Insurance on auto loans.
State Attorneys General across the United States alleged that Wells Fargo repeatedly violated consumer protection laws. In their investigations, they found that the bank set sales goals and incentive compensation program, which led to consumer abuses.
Well Fargo employees allegedly engaged in improper sales practices
The attorneys general noted that Wells Fargo employees “engaged in improper sales practices” to achieve sales goals and gain financial rewards. Wells Fargo failed to immediately detect and prevent employees from doing the following:
- Opening accounts without customers’ knowledge or consent;
- Transferring funds between customers’ accounts their knowledge or consent;
- Applying for credit cards without customers’ knowledge or consent;
- Issuing debit cards without customers’ knowledge or consent;
- enrolling customers into online banking services without their knowledge or consent;
- Submitting renters insurance and/or simplified term life insurance policy applications to AMIG, Assurant, Great West, and/or Prudential and making payments from customers’ checking and/or savings accounts without their knowledge or consent; and
- Engaging in misrepresentations and omissions to customers regarding Accounts and Insurance Referral Products.
In addition, the attorneys general noted that Well Fargo admitted that its employees opened over 3.5 unauthorized accounts and enrolled 528,000 customers in online bill pay.