Wells Fargo & Co. is under investigation by regulators in California and New Jersey to determine whether the bank signed up customers for Prudential Financial Inc. life policies without their permission.
The announcements Monday by regulators followed fraud and misconduct allegations raised last week in a whistleblower lawsuit claiming the insurer covered up an internal inquiry that found San Francisco-based Wells Fargo may have fraudulently opened Prudential’s low-cost MyTerm policies. California Insurance Commissioner Dave Jones said that his department will work with New Jersey watchdogs to examine “all aspects” of the allegations, and that Prudential’s practices will be investigated as well.
“We’ll be looking at whether there were any licensing violations associated with” Wells Fargo’s sales, Jones said Monday in a phone interview. “We’ll also be looking at whether they violated the law by allegedly signing people up for insurance without their permission.”
The insurer said earlier Monday that it’s halting distribution of MyTerm life policies through Wells Fargo. The coverage was available through kiosks in Wells Fargo branches, or could be purchased online using the bank’s accounts. Newark, New Jersey-based Prudential said it will reimburse customers who were charged for coverage they didn’t want.
“We are deeply concerned about these allegations as they are completely counter to our values and our commitment to providing customers only the products and services they need and want,” Ancel Martinez, a bank spokesman, said in an e-mailed statement. “We are working with Prudential to investigate any unauthorized or inappropriate referrals.”
Wells Fargo agreed in September to pay $185 million in fines to settle a federal probe that it may have opened millions of bank accounts for customers who didn’t want them.