Wells Fargo Bank N.A. (Wells Fargo) will pay over $6 million to Massachusetts to resolve allegations that it violated state consumer protection laws by using various unfair and deceptive practices against customers, Attorney General Maura Healey announced today.
This settlement, with Massachusetts and attorneys general from 50 states and the District of Columbia, will resolve allegations that Wells Fargo opened millions of unauthorized accounts and enrolled customers into online banking services without their knowledge or consent, improperly referred customers for enrollment in third-party rental and life insurance policies, improperly charged auto loan customers for force-placed and unnecessary collateral protection insurance, 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 states alleged that Wells Fargo imposed aggressive and unrealistic sales goals on bank employees and implemented an incentive compensation program where employees could qualify for credit by selling certain products to customers. The states further alleged that Wells Fargo’s sales goals and the incentive compensation program created an impetus for employees to engage in improper sales practices in order to satisfy such sales goals and earn financial rewards. Those sales goals became increasingly harder to achieve over time, the states alleged, and employees who failed to meet them faced potential termination and criticism from their supervisors.