Wells Fargo Agrees to $575M Settlement Over Sales Practices

Wells Fargo opened more than 3.5 million unauthorized accounts and enrolled 528,000 customers in online billpay via improper sales practices, Becerra’s office says. The bank also enrolled some clients in renter and life-insurance policies that they did not authorized, and — from 2005 to 2016 — added collateral protection insurance or delayed cancellation of such insurance on millions of car loans.

“This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank,” Wells Fargo CEO and President Tim Sloan, explained in a statement.

As part of the agreement, Wells Fargo will

• Maintain designated teams to review and respond to client inquiries on issues covered in the settlement;
• Create and maintain a website that describes the issues and the bank’s remediation efforts, and identifies contact information for clients with questions or concerns; and
• Provide periodic reports to the states on the progress of its remediation efforts.

The bank accrued $400 million of the settlement amount by Sept. 30 and expects to accrue the remaining $175 million by Dec. 31.

It continues to be under the scrutiny of the Federal Reserve, which in February froze its growth until internal controls and management have improved. The Fed reaffirmed this measure earlier this month.

For more details, see When Will Wells Fargo’s Scandals End?