Wells Fargo to pay $575 million settlement for violating consumer protection laws

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Wells Fargo Bank N.A. will pay $575 million to resolve claims that the bank violated consumer protection laws in Texas, 49 other states and the District of Columbia through alleged unfair and deceptive trade practices.

Texas’ share of the settlement is approximately $47 million. The agreement represents the most significant engagement involving a national bank by state attorneys general acting without a federal law enforcement partner.

Between 2009 and 2016, Wells Fargo opened as many as 3.5 million bank accounts, transferred funds, filed credit card applications and issued debit cards without customers’ knowledge or consent. The bank disclosed that it found 528,000 unauthorized enrollments of customers in its online bill payment service.

Wells Fargo stands accused of imposing aggressive and unrealistic sales goals on bank employees. Workers who met the bank’s sales goals received bonuses, and those who did not risked losing their jobs.

“This settlement holds Wells Fargo accountable for its widespread victimization of its customers through unfair and deceptive trade practices,” Attorney General Paxton said.

Wells Fargo will create and maintain a website for consumers to use to access the program and will provide periodic reports to the states about the program’s progress. Wells Fargo escalation phone numbers and the website address, will be available on or before February 26, 2019.

Wells Fargo agreed to provide more than $385 million to approximately 850,000 auto finance customers improperly charged premiums, interest and fees. The remediation will include payments to over 51,000 customers whose vehicles were repossessed. The bank will provide refunds totaling more than $37 million to certain auto finance customers who were deprived of proper refunds sold as part of motor vehicle financing agreements.

Wells Fargo will refund over $100 million to residential mortgage customers for improper rate lock extension fees.  

Previously, Wells Fargo committed to providing restitution to consumers in excess of $600 million, and it will pay over $1 billion in civil penalties to the federal government.

Wells Fargo improperly referred customers for enrollment in third-party renters and life insurance policies; charged auto loan customers for insurance they did not need; 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 Federal Reserve is restricting Wells Fargo from exceeding its current total asset size.

View the multistate agreement with Wells Fargo here: https://bit.ly/2EOJtet 

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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