CONCORD — New Hampshire will receive nearly $1.2 million as part of a 50-state, $575 million settlement that Wells Fargo Bank has made to resolve claims the bank violated consumer protection laws, including setting up millions of phony bank accounts to meet sales quotas.

Attorney General Gordon J. MacDonald said the settlement comes as a result of a nationwide lawsuit against the bank for other actions such as enrolling customers into online banking services without their knowledge or consent, improperly referring customers for enrollment in third-party renters and life insurance policies, improperly charging auto loan customers, failing to ensure that customers received refunds of unearned premiums and incorrectly charging customers for mortgage rate lock extension fees.

The attorney general in Iowa brought the first claim against Wells Fargo and announced the settlement along with executives with the San Francisco-based bank.

New Hampshire is one of 12 states that does not have any Wells Fargo Bank branch locations.

Connecticut, with 67 bank sites, is the only New England state where Wells Fargo has a physical presence.

The state’s share will go into the Consumer Escrow Account which is where all multi-state settlement monies from consumer cases are deposited, said Kate Spiner, MacDonald’s communications director.

Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, and debit cards were issued without the customers’ knowledge or consent.

The bank has also identified 528,000 online bill pay enrollments nationwide that may have resulted from improper sales practices at the bank. In addition, Wells Fargo improperly submitted more than 6,500 renters insurance and/or simplified term life insurance policy applications and payments from customer accounts without the customers’ knowledge or consent.

Under this settlement, Wells Fargo will set up a consumer redress program that will ensure consumers are made whole for all of these losses.

This settlement amount is the largest involving a national bank to resolve a state consumer protection claim, MacDonald said.

“This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank,” Chief Executive Officer Tim Sloan said in a statement.

Two years ago, Wells Fargo agreed to pay $190 million to settle federal government claims that the bank created phony customer accounts, and improperly referred and charged customers for various financial services products. The deal announced on Friday will settle similar claims from all 50 states and the District of Columbia.

At the end of the third quarter of 2018, Wells Fargo had set aside $400 million of the settlement amount and expects to allocate the remaining $175 million by the end of this year, the company said in the statement.

The agreement marks a major turning point after cascading bad practices emerged from Wells Fargo, starting around 2015.

State and federal regulators lost patience with Wells Fargo’s pledge of making amends and had put restrictions on its business.

They also fined the bank more than $1.2 billion in penalties for its bad behavior.

“Instead of safeguarding its customers Wells Fargo exploited them,” California Attorney General Xavier Becerra said in a statement. “This is an incredible breach of trust that threatens not only the customer who depended on Wells Fargo, but confidence in our banking system.”

Friday’s settlement marks the most recent in a long list of penalties related to Wells Fargo’s sales scandal, which initially related to the bank opening millions of accounts in customers’ names without their permission.

After reaching settlements with the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, the Los Angeles city attorney and the New York attorney general, Wells Fargo still faces probes by the U.S. Securities and Exchange Commission, the Department of Justice and the Department of Labor, according to its most recent securities filing.

Thursday, June 04, 2020
Wednesday, June 03, 2020