It turns out that there are consequences beyond a $575 million fine for illegally and secretly selling insurance policies that customers neither wanted nor needed, which is good, because Wells doesn’t even have to report fines of less than 10 figures on its 10-k anymore. And those consequences include another fine too small to even mention, and also being doubly prohibited from selling insurance policies customers don’t want! For a while! And then only if they pay an additional fine of no consequence! Because, after all, being barred from doing something has always stood in the way of Wells doing it anyway, and then giving their CEO a raise all the same.
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. The company also agreed to not apply for a license for at least two years following the expiration of their current licenses.
The $5 million of the penalty is due immediately. If the company ever seeks to return to the California insurance marketplace, it then must pay the remaining $5 million penalty….
From 2008 to 2016, Wells Fargo customers were issued roughly 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.
$10M Penalty in Wells Fargo California Case, Can’t Do New Business Until At Least 2020 [Insurance Journal]
Wells Fargo fined $575 million by all 50 states [MarketWatch]