Wells Fargo has agreed to pay $575m to settle claims made by attorneys general from all 50 US states and the District of Columbia that the bank opened fake accounts and followed certain dubious practices.
Image: A Wells Fargo bank on College Avenue in Berkeley. Photo: courtesy of Coolcaesar at English Wikipedia.
The latest settlement comes after the bank agreed to pay $190m in 2015 to settle federal government claims of creating fake customer accounts without their knowledge, and improperly referring and charging customers for various financial services products, Reuters reported.
At that time, the bank also admitted that it sold auto insurance and other financial products to customers who didn’t need them.
The settlement reached with the attorneys general pertains to previously disclosed retail sales practices, auto collateral protection insurance (CPI) and guaranteed asset/auto protection (GAP), and mortgage interest rate lock matters.
Wells Fargo noted that it has been working with federal regulators to address the issues and that it is remediating affected customers.
Wells Fargo CEO and president Tim Sloan said: “This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank.”
Pursuant to the terms of the agreement reached with the attorneys general, the bank will deploy special teams to review and respond to customer complaints related to banking and sales practices.
As of the end of third quarter of this year, the company had accrued $400m of the settlement amount and expects to allocate the balance $175m by the end of the fourth quarter.
Earlier this year, Wells Fargo was fined $1bn by federal regulators for consumer mistreatment. The company also settled a $480m class-action lawsuit brought by investors.