OKLAHOMA CITY – Attorney General Mike Hunter today announced a settlement agreement has been reached with Wells Fargo Bank that addresses the bank’s account scandal and business practices that date as far back as 2009.
As part of the settlement, Wells Fargo will pay $575 million to 50 states and the District of Columbia. The bank will also create and implement a consumer redress review program, where customers who have not been made whole through other restitution programs can seek a review for possible relief.
More information on the review program, including phone numbers and a website with more information will be made available by Wells Fargo on or before Feb. 26.
Oklahoma will receive $2.64 million, which will be used for costs and attorneys’ fees associated with the investigation, for future litigation and investigations, consumer education and enforcement of state consumer protection laws.
“Although the company has already made restitution to most victims, my fellow attorneys general and I wanted to further hold the company accountable to ensure this never happens again,” Attorney General Hunter said. “The provisions we have agreed upon will provide better protections to customers and all stakeholders doing business with the bank. I encourage Oklahoma victims who have not yet been made whole to file their complaints as soon as the dedicated website is made available.”
Among the findings during the investigation, attorneys general allege the bank 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; and failure to ensure customers received refunds of unearned premiums on certain optional auto finance products and incorrectly charging customers for mortgage rate lock extension fees.
The states also allege that Wells Fargo imposed aggressive and unrealistic sales goals on bank employees, implementing an incentive compensation program where employees could qualify for credit by selling certain products to customers.
The bank's sales goals and the incentive compensation program created motivation for employees to engage in improper sales practices in order to satisfy sales goals and earn financial rewards. Those sales goals became increasingly harder to achieve over time, and employees who failed to meet them faced potential termination and career-hindering criticism from their supervisors.
To read the settlement agreement, click here.