Attorneys general for the 50 states and the District of Columbia announced a $575 million settlement Friday with Wells Fargo to resolve state consumer protection claims for unauthorized accounts and other alleged unfair trade practices. Delaware is set to receive $2 million from the settlement.
Wells Fargo agreed to pay the settlement after the states said it violated laws by opening millions of unauthorized accounts and enrolled customers into online banking services without their knowledge or consent. It also improperly referred customers for enrollment in third-party renters and life insurance policies, charged auto loan customers for forced-placed and unnecessary collateral protection insurance, and incorrectly charged customers for mortgage rate lock extension fees, among misdeeds, according to the states.
“Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future,” said California Attorney General Xavier Becerra. “Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products—from bank accounts to insurance—that they never wanted. This is an incredible breach of trust that threatens not only the customers who depended on Wells Fargo, but confidence in our banking system. As our investigation found, Wells Fargo’s conduct was unlawful and disgraceful.” California will get the most from the settlement, receiving $148.7 million.
Wells Fargo has acknowledged opening millions of deposit, credit card and other accounts, and conducting transfers of funds without customer authorization over various periods from 2002 through 2017.
The bank acknowledges “misbehavior,” according to California’s attorney general. It opened more than 3.5 million unauthorized accounts, enrolled 528,000 customers in online bill pay based on improper sales practices, and provided renter and life-insurance policies its customers never authorized. From 2005 to 2016, Wells Fargo added collateral protection insurance or delayed cancellation of such insurance on millions of auto loans.
In an emailed statement Friday, the company’s chief executive officer and president Tim Sloan said: “This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank.”