Wells Fargo Bank has settled with fifty states including Delaware over alleged state consumer protection violations.
Under the settlement filed Dec. 28, Wells Fargo will create a consumer redress review program. Delawareans impacted by Wells Fargo’s alleged violations will be able to seek compensation through a dedicated website which is expected to go live in late February.
The settlement resolves allegations by Delaware and other state attorneys general of unlawful practices by the bank in the realms of auto and renters insurance, mortgage interest rate lock fees and retail banking sales practices.
“We heard a couple years ago about Wells Fargo employees in branches opening checking accounts or savings accounts, and making referrals of the retail banking customers for various services and products that the customer never actually asked for and often times was never informed that they had been signed up for,” said State Deputy Attorney General and Assistant Director of the Consumer Protection Unit Gillian Andrews.
According to the Delaware Department of Justice, other allegations include improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, improperly referring customers for enrollment in third-party renters and life insurance policies, and incorrectly charging customers for mortgage rate lock extension fees.
Andrews says the allegations were a result of three separate investigations by state attorneys general, which Delaware joined but did not lead. She called the Dec. 28 settlement “seminal” because the 50 attorney general offices reached it without a federal law enforcement partner.
“Whenever we can come together to address bad consumer practices as a whole it’s better for our offices from a resource perspective but also for the consumers, to ensure that [it’s not the case that] Pennsylvania and New Jersey residents are getting relief, but Delaware isn’t,” said Andrews. “So I think moving forward we will see a lot more coordination amongst the Attorney General offices.”
Delaware will receive roughly $2 million of the $575 million Wells Fargo will pay to all 50 states plus the District of Columbia as a result of the settlement.
Officials say the money will go to Delaware’s Consumer Protection Fund to pay investigative costs, consumer outreach activities and operations of the Consumer Protection Unit in the state Department of Justice.
According to the state DOJ, prior to the settlement Wells Fargo entered consent orders with federal authorities, including restitution to consumers in excess of $600 million.