Wells Fargo to pay $575m settlement for setting up fake banking accounts

Wells Fargo to pay states $575M for phony accounts, deception scandals

Wells Fargo to pay states $575M for phony accounts, deception scandals

Arizona is getting one of the largest slices of Wells Fargo's $575 million settlement over consumer law violations, it was announced Friday.

Wells Fargo will pay $575m in a settlement with attorneys general from all 50 states and the District of Columbia, who were investigating fake accounts opened without the knowledge of customers and other dubious practices.

In addition to the monetary settlement, Wells Fargo must establish a team to review and respond to customer inquiries about restitution programs, and create a website detailing the bank's remediation efforts.

The settlement ends wide-ranging investigations that began in 2016 when Wells Fargo acknowledged firing 5,000 employees for opening sham accounts customers didn't want in order to meet the bank's aggressive sales goals and qualify for bonuses. The company has committed to or already provided restitution to consumers in excess of $600 million. "This bank opened millions of accounts for customers who didn't know about them, charged auto-finance customers for insurance policies they didn't want or need, and charged mortgage customers over $100 million in unwarranted fees".

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"Wells Fargo's corporate culture led to repeated breaches of its customers' trust", said Attorney General Grewal. "Fortunately, both federal and state authorities have interceded to remedy Wells Fargo's misconduct". "Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products - from bank accounts to insurance - that they never wanted".

In April, two federal regulators fined the bank $1 billion for forcing customers into auto insurance and charging mortgage borrowers unfair fees.

The $17 million Wells Fargo payout to New Jersey is the sixth highest amount recovered among all jurisdictions participating in the multi-state settlement.

Under previous settlements with the federal Office of the Comptroller of the Currency ("OCC") and the federal Consumer Financial Protection Bureau ("CFPB"), Wells Fargo must pay over $1 billion in civil penalties to the federal government.

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