Wells Fargo will pay $575 Million dollars to customers as a penalty for thousands of accounts opened without the customers permission. Nebraska will get $5.2 million.
Attorney General Doug Peterson says Wells Fargo has 60 days to open a website for customers to apply for settlements. Each consumer contacting the website will be reviewed for possible compensation.
Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, and debit cards were issued without the customers’ knowledge or consent. The bank has also identified 528,000 online bill pay enrollments nationwide that may have resulted from improper sales practices at the bank. In addition, Wells Fargo improperly submitted more than 6,500 renters insurance and/or simplified term life insurance policy applications and payments from customer accounts without the customers’ knowledge or consent. Bank employees opened checking accounts, applied for credit and debit cards, and even applied for life insurance policies for customers in order to meet sales quotas.
According to Peterson, “It is very disappointing that a national bank would engage in such conduct at the cost of their loyal customers. Fortunately, both federal and state authorities have interceded to remedy Wells Fargo’s misconduct. I hope that the message that this settlement sends is clear to other financial institutions that such consumer abuse will result in a significant penalty.”
Wells Fargo has previously entered consent orders with federal authorities – including the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau. It will pay over $1 billion in civil penalties to the federal government in addition to its settlement with the states. Additionally, under an order from the Federal Reserve, the bank is required to strengthen its corporate governance and controls, and is currently restricted from exceeding its total asset size.