NJ to get 17M in Wells Fargo consumer abuse settlement

By: Daniel J. Munoz
December 28, 2018 2:31 pm

“This settlement should send a message to all financial institutions that they need to take steps to avoid similar consumer protection violations," New Jersey Attorney General Gurbir Grewal said in a statement on Friday.-(THINKSTOCK)

New Jersey will receive $17 million from a 50-state, $575 million settlement with Wells Fargo Bank over illegal mortgage and auto lending, as well as unlawful sales practices, the state attorney general announced Friday.New Jersey will receive $17 million from a 50-state, $575 million settlement with Wells Fargo Bank over illegal mortgage and auto lending, as well as unlawful sales practices, the state attorney general announced Friday.

“Wells Fargo’s corporate culture led to repeated breaches of its customers’ trust,” Attorney General Gurbir Grewal said in a statement. “This settlement should send a message to all financial institutions that they need to take steps to avoid similar consumer protection violations, because we stand ready to hold the financial industry accountable.”

Federal investigations stemming back to September 2016 revealed that Wells Fargo employees opened millions of accounts in people’s names, without their consent or knowledge, in order to meet stringent sales quotas.

More than 3.5 million such accounts were opened, funds transferred, debit cards issued and credit card applications submitted without customer approval, the Office of the Attorney General said.

The financial giant also forced unwanted auto insurance onto as many as 850,000 customers who had taken out car loans. Bank employees charged premiums, interests and fees for bogus or excessive insurance identical to what customers already had in place.

Per the Friday settlement, the bank has to pay all those auto customers and provide restitution to 51,000 customers whose cars were repossessed. As part of the settlement, Wells Fargo will also create a consumer restitution review program for customers who do not believe they were fully reimbursed.

In 2016, Wells Fargo was previously ordered to pay a $185 million fine over its unlawful sales practices.

According to the office of the attorney general, New Jersey’s payout from the multi-state suit is the sixth highest amount recovered among participating jurisdictions.