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World

Wells Fargo in $575mn US settlement on consumer ills

NEW YORK: Wells Fargo agreed to a $575 million nationwide settlement over its opening of millions of unauthorized custom

28 Dec 2018

NEW YORK: Wells Fargo agreed to a $575 million nationwide settlement over its opening of millions of unauthorized customer accounts and other alleged predatory practices, the bank and US authorities announced Friday.

The agreement between the bank and attorneys general from the 50 states plus the District of Columbia covers a series of scandals that have dogged the big US bank since 2016, when it was fined $185 million by US regulators over its so-called fake accounts scandal.

Wells Fargo, which replaced its chief executive and overhauled its system for compensating staff in the wake of the debacle, said the deal "underscores our serious commitment to making things right in regard to past issues as we work to build a better bank."

In addition to the payments, San Francisco-based bank agreed to maintain a dedicated team and website to help consumers work through the problem and to periodically report to the states on the status of remediation efforts.

The agreement will help address conduct that was "unlawful and disgraceful," said California Attorney General Xavier Becerra, whose state will receive $148.7 million, by the far the largest settlement.

"Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products -- from bank accounts to insurance -- that they never wanted," Becerra said.

"This is an incredible breach of trust that threatens not only the customers who depended on Wells Fargo, but confidence in our banking system."

Wells Fargo has identified some 3.5 million accounts and 528,000 online bill pay enrolments that may have not been authorized by customers, according to allegations listed in the settlement.

Other alleged violations short-changed consumers on auto insurance, mortgage rates and collateral protection insurance.

Copyright AFP (Agence France-Press), 2018