Idaho to see part of $575 million Wells Fargo settlement

Wells Fargo settlement
Posted at 10:32 AM, Dec 28, 2018
and last updated 2018-12-28 12:32:40-05

BOISE — Attorney General Lawrence Wasden announced today that Wells Fargo Bank N.A. will pay $575 million to resolve claims that the company violated state consumer protection laws. The settlement includes all 50 states and the District of Columbia. It resolves numerous allegations, including that the bank pushed a number of its products on consumers without their knowledge or consent as a means of bolstering sales numbers. The settlement covers bank activities dating back to 2002.

Idaho’s portion of the settlement totals $5.27 million dollars. The money will be deposited into the state’s Consumer Protection Fund.

“Wells Fargo set aggressive and unrealistic sales goals for its employees and incentivized them to inflate their results,” Wasden said. “By doing so, the company created an impetus for its workers to play fast and loose with the rules. Their dishonest behavior harmed consumers. This settlement, along with prior federal agency orders, seeks to hold the company accountable for its actions.”

The states alleged Wells Fargo employees opened millions of unauthorized accounts and enrolled customers into online banking services without their knowledge or consent, improperly referred customers for enrollment in third-party renters and life insurance policies, improperly charged auto loan customers for force-placed and unnecessary collateral protection insurance, failed to ensure that customers received refunds of unearned premiums on certain optional auto finance products, and incorrectly charged customers for mortgage rate lock extension fees.

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. 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.

Wells Fargo has agreed to provide remediation of more than $385 million to approximately 850,000 auto finance customers. The remediation will include payments to over 51,000 customers whose cars were repossessed.

As part of its settlement with the states, Wells Fargo has also agreed to implement within 60 days a program through which consumers who believe they were affected by the bank's conduct, but fell outside the prior restitution programs, can contact Wells Fargo to be reviewed for potential redress. Wells Fargo will create and maintain a website for consumers to access the program and will provide periodic reports to the states about ongoing restitution efforts.

Wells Fargo has previously entered consent orders with federal authorities. The company has committed to or already provided restitution to consumers in excess of $600 million.

More information on the redress review program, including Wells Fargo escalation phone numbers and the Wells Fargo dedicated website for the program will be available by February 26, 2019.