Wells Fargo will pay $575 million to resolve claims in all 50 states and the District of Columbia alleging the San Francisco-based bank violated consumer protection laws by opening millions of fake bank accounts for its customers.
The bank also agreed to measures that will give its customers an extra level of protection by creating a customer restitution program, an announcement of the Dec. 28 agreement explained. Any Wells Fargo customers who haven’t been reimbursed through the restitution programs already in place at the bank can turn to a bank escalation team for relief.
The settlement resolves claims that Wells Fargo violated state consumer protection laws when it scammed its own customers by opening millions of unauthorized deposit and credit accounts and charging the associated fees for the fraudulent accounts.
The agreement also resolves claims that Wells Fargo improperly referred customers for enrollment in third-party renters and life-insurance policies; wrongfully charged its auto loan customers for unnecessary auto insurance coverage it forced upon them; failed to ensure that customers received refunds of unearned premiums on certain optional auto finance products; and improperly charged customers for mortgage rate lock extension fees.
California will get $147.8 million — more than a quarter of the settlement funds — because the state has more Wells Fargo customers living there than any other state.
California Attorney General Xavier Becerra called the bank’s conduct “unlawful and disgraceful” in his announcement of the settlement.
“Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future,” said 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.”