CHARLESTON—West Virginia Attorney General Patrick Morrisey today announced a $575 million, multistate settlement with Wells Fargo Bank to resolve claims that the bank violated state consumer protection laws.
To date, this settlement represents the most significant engagement involving a national bank by state attorneys general acting without a federal law enforcement partner.
“Improper business practices cannot be tolerated,” Attorney General Morrisey said. “This settlement sends a stern message to businesses that consumer protection laws can and will be upheld in every state.”
The states alleged that Wells Fargo opened millions of unauthorized accounts and enrolled customers in online banking services without their knowledge or consent and improperly referred customers for enrollment in third-party renters and life insurance policies.
They also alleged the bank improperly charged auto loan customers for force-placed and unnecessary collateral protection insurance, failed to ensure that customers received refunds of unearned premiums on certain optional auto finance products and incorrectly charged customers for mortgage rate lock extension fees.
Wells Fargo also allegedly imposed aggressive and unrealistic sales goals on bank employees and implemented an incentive compensation program where employees could qualify for credit by selling certain products to customers, which the states claim motivated employees to engage in improper sales practices to meet sales goals and earn rewards.
As a result of the settlement, Wells Fargo will create a consumer redress review program through which consumers who have not been made whole through other restitution programs can seek review of their inquiry or complaint for possible relief.
Wells Fargo has agreed to provide remediation of more than $385 million to approximately 850,000 auto finance customers, including payments to more than 51,000 customers whose cars were repossessed.
The bank has also agreed to refund more than $100 million in mortgage rate lock extension fees to affected customers.
More information on the redress review program, including Wells Fargo escalation phone numbers and the Wells Fargo dedicated website address for the program will be available on or before February 26, 2019.
Read a copy of the settlement at http://bit.ly/2Rk0SlH.