Wells Fargo under investigation for alleged unauthorised sales of Prudential policies
13 Dec 2016
Wells Fargo & Co is now under investigation by regulators in California and New Jersey to determine whether the bank signed up customers for Prudential Financial Inc life policies without their permission.
The announcements yesterday by regulators come after allegations of fraud and misconduct surfaced last week in a whistle-blower lawsuit in which it was claimed that the insurer covered up an internal inquiry that found San Francisco-based Wells Fargo might have fraudulently opened up Prudential's low-cost MyTerm policies.
California insurance commissioner Dave Jones said his department would work with New Jersey authorities to examine ''all aspects'' of the allegations, and that Prudential's practices would also be investigated.
''We'll be looking at whether there were any licensing violations associated with'' Wells Fargo's sales, Jones said yesterday in a phone interview, Bloomberg reported. ''We'll also be looking at whether they violated the law by allegedly signing people up for insurance without their permission.''
The insurer said earlier yesterday that it was putting an end to the distribution of MyTerm life policies through Wells Fargo. The coverage was available through kiosks in Wells Fargo branches, or could be purchased online with the bank's accounts.
According to the Newark, New Jersey-based company, it would reimburse customers who were charged for coverage they did not want.
Meanwhile, Prudential said a number of former employees were fired over an ethics complaint not related to Wells Fargo. The insurer added however, that it was reviewing how its policies were sold through Wells Fargo and had asked for the bank's cooperation.
The Los Angeles Times quoted Prudential executive vice president Steve Pelletier, ''We stand behind the MyTerm product, but have decided to suspend sales of that product through Wells Fargo's retail banking franchise until we have all the facts about whether it is being distributed properly and in the best interest of customers.''
