South Carolina will receive nearly $6.8 million as part of a nationwide settlement with Wells Fargo Banks over millions of unauthorized accounts created without customers’ knowledge.
The state’s share is part of the $575 million settlement between the California-based bank and all 50 states plus the District of Columbia.
“Hard working families who must make every dollar count can ill afford such alleged deceptive and unfair practices by their bank,” state Attorney General Alan Wilson said in a statement last week announcing the settlement.
The agreement resolves claims that Wells Fargo violated state consumer protection laws by using deceptive practices to increase the number of services it provided.
The bank also agreed to create a consumer redress review program through which consumers who have not already received restitution can seek review of their inquiry or complaint by a bank escalation team for possible relief.
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.
States are barred by federal law from releasing the number of residents affected by Wells Fargo’s actions because the information is considered confidential.
The states accuse the bank of essentially encouraging its employees to create the fraudulent accounts and services by imposing unrealistic sales goals which they said created an impetus for employees to engage in improper sales practices.
Additionally, the states claimed Wells Fargo failed to ensure its customers received proper refunds of unearned portions of optional Guaranteed Asset/Auto Protection (GAP) products sold as part of motor vehicle financing agreements. The bank agreed to provide refunds totaling more than $37 million as part of the settlement.
“South Carolina’s consumer protection laws are in place to protect our people who bank in our State and clearly Wells Fargo didn’t comply with our laws,” Wilson continued. “I’m glad that Wells Fargo has agreed to this settlement and will take steps to make sure this doesn’t happen again.”
Two federal agencies have already fined the bank $1 billion for forcing customers into car insurance and charging late extension fees for mortgage borrowers when the delay was due to the bank’s actions. The company also settled a $480 million case with investors.