$10 million penalty in Wells Fargo case
News: 2019 Press Release
SACRAMENTO, Calif. — Wells Fargo has agreed to pay a $10 million penalty as part of a settlement agreement with the California Department of Insurance. This settlement resolves the department’s accusation alleging improper insurance sales practices related to Wells Fargo’s online insurance referral program. The improper practices resulted in consumers being signed up and charged for insurance products without their consent.
“The Department of Insurance’s investigation found that Wells Fargo was signing up and charging customers for insurance without their consent,” said Insurance Commissioner Dave Jones. “Banks and other financial institutions should never be allowed to prey on their customers’ trust without being held accountable.”
Wells Fargo has agreed to not transact any new business during the remaining term of its two insurance licenses, which expire in July and September 2020, respectively. The company also agreed to not apply for a license for at least two years following the expiration of their current licenses. Wells Fargo has provided restitution to all California consumers who were charged premiums, bank fees and other direct monetary losses connected to the unauthorized insurance policies.
$5 million of the penalty is due immediately. If the company ever seeks to return to the California insurance marketplace, it will then pay the remaining $5 million penalty. The Department may also decline to issue a new license.
In November 2017, the department served on Wells Fargo an accusation seeking revocation of Wells Fargo’s insurance license for improper insurance sales practices. The accusation was the result of an investigation opened at the direction of Insurance Commissioner Dave Jones, which found that from 2008 to 2016, Wells Fargo customers were issued approximately 1,500 insurance policies without their knowledge or permission. In some cases, employees told consumers to enter their personal information on a policy application merely to receive a quote, but Wells Fargo employees later submitted the application to the insurer to purchase the policy without the consumer’s permission.
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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.