Attorney General Announces $2.8 Million Settlement with Wells Fargo
A $2.8 million settlement with banking giant Wells Fargo was announced Friday by Kentucky Attorney General Andy Beshear.
The attorney general's office stated that Wells Fargo entered into the settlement over alleged unfair and deceptive trade practices.
In all, Wells Fargo agreed to pay $575 million to all 50 states. Kentucky's share will be placed into the state's general fund for lawmakers to appropriate during the 2020 legislative budget session, Beshear said.
As part of the settlement, Wells Fargo will create a consumer redress review program through which consumers who have not been made whole through current restitution programs can seek review of their inquiry or complaint by a bank escalation team for possible relief.
The settlement resolves claims that Wells Fargo violated Kentucky consumer protection laws. Beshear and the states allege the bank imposed aggressive and unrealistic sales goals on bank employees, and implemented an incentive compensation program where employees could qualify for credit by selling certain products to customers.
It’s alleged that bank 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.
“The settlement represents the most significant enforcement against a national bank conducted solely by state attorneys general,” Beshear said. “The nearly $2.8 million we secured is a sizable amount for our General Fund, and could be used for important causes such as new textbooks for our school children.”
As part of its settlement with the states, Wells Fargo has agreed to implement within 60 days a program through which Kentuckians who believe they were affected by the bank’s conduct, but fall outside of any prior restitution programs, can contact Wells Fargo to be reviewed for potential compensation.
Wells Fargo will create and maintain a website for consumers to use to access the program and will provide periodic reports to Beshear’s office about ongoing restitution efforts.