R.I. to receive $1.2M from $575M national settlement with Wells Fargo

WELLS FARGO WILL pay Rhode Island $1.2 million as part of a $575 million, 50-state settlement over claims that the bank violated consumer protection laws in several capacities. / BLOOMBERG NEWS FILE PHOTO/ERIC THAYER
WELLS FARGO WILL pay Rhode Island $1.2 million as part of a $575 million, 50-state settlement over claims that the bank violated consumer protection laws in several capacities. / BLOOMBERG NEWS FILE PHOTO/ERIC THAYER

PROVIDENCE – Rhode Island will receive $1.2 million from a $575 million, 50-state settlement with Wells Fargo Bank N.A. over states’ claims that the bank violated consumer protections laws, according to R.I. Attorney General Peter F. Kilmartin Friday.

Wells Fargo settled for allegedly opening unauthorized accounts in customers’ names, improperly referring customers for enrollment in third-party renters and life insurance policies, improperly charging auto-loan customers for force-placed and unnecessary collateral protection insurance, failing to ensure that customers received refunds of unearned premiums on certain optional auto-finance products and for incorrectly charging customers for mortgage rate-lock extension fees.

It was not clear how many Rhode Islanders were affected by Wells Fargo’s alleged misconduct, as that information is confidential pursuant to federal law, however a spokesman for the Office of the R.I. Attorney General said there will be a process to identify those affected in the Ocean State.

Wells Fargo has multiple locations in Rhode Island and engages in corporate financing, commercial banking, financial advising, mortgage banking and brokering in the state, among other services. The bank has no retail banks in the Ocean State.

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Rhode Island’s $1.2 million may be used for purposes such as lawyers’ fees and investigation costs, placed into a consumer protection law enforcement fund, used for future consumer protection, consumer education and a litigation fund or a local consumer aid fund or revolving fund, the Office of the R.I. Attorney General said. The funds will specifically be used at the discretion of the Office of the R.I. Attorney General.

The states argued that Wells Fargo’s sales goals were unrealistic sand aggressive, and incentivized misconduct among its workers and against its consumers.

“Wells Fargo aggressively deceived consumers on multiple levels all in the name of increasing profits, adversely impacting millions of consumers financially,” Kilmartin said in a statement.  “It is a prime example of Wall Street executives eschewing their responsibilities to customers and thumbing their nose at regulations put in place to ensure these types of practices never happened in the first place. Today’s settlement is a result of the hard work by states to get relief for consumers, make Wells Fargo pay for its actions and put in further controls to ensure the company does not engage in such deceptive practices in the future.”

Nationally, Wells Fargo has identified 3.5 million accounts in which customers’ accounts were opened, funds were transferred, credit card applications were filed and debit cards were issued without customers’ knowledge or consent.

Wells Fargo has previously entered into consent orders with federal authorities related to its alleged conduct. The company has already committed to pay or has paid more than $600 million to consumers through federal agreements and will pay more than $1 billion in civil penalties to the federal government.

The bank is also required to strengthen its corporate governance by order of the Federal Reserve.

The bank has agreed to set up a program through which consumers that believe they have been affected by the bank’s conduct, but fell outside the previous restitution efforts, may contact the bank for review and potential redress.

Chris Bergenheim is the PBN web editor. Email him at Bergenheim@PBN.com.

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