Wells Fargo agreed Friday to pay $575 million to 50 states and the District of Columbia in a settlement tied to its problematic sales practices, mortgage rate-lock fees and add-on products for auto loans from 2002 through 2017.
About $150 million will go to affected individuals in California, which says the San Francisco-base bank “opened unauthorized accounts and enrolled customers in bank products to meet aggressive sales goals, as result of extreme management pressure, threat of job loss for branch employees, and an abusive company culture.”
Some of the troubled sales practices began attracting widespread headlines in 2016, though the media began covering the fraud in 2011. Wells Fargo Advisors has had a net loss of 1,012 registered reps since the fall of 2016. As of Sept. 30, its advisor headcount was 14,074 — down 490 from a year ago and 152 from the second quarter of 2018.
According to California Attorney General 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 … confidence in our banking system. As our investigation found, Wells Fargo’s conduct was unlawful and disgraceful.”