NEW YORK Dec 10 U.S. insurer Prudential
Financial is investigating whether Wells Fargo
employees signed up customers for its life insurance policies
without their knowledge, a spokesman said on Saturday.
Sales practices at Wells Fargo have been under a spotlight
since September when federal regulators ordered the San
Francisco-based bank to pay $190 million in fines and
restitution because they said its high pressure sales
environment pushed employees to open as many as 2 million
deposit and credit card accounts without customers' permission.
Prudential has a partnership with Wells Fargo to sell a
low-cost life insurance policy, known as MyTerm, to the bank's
Since bankers are not licensed to sell insurance, Wells
Fargo employees were meant to direct customers to either
self-service kiosks in branches or online to buy the insurance,
without getting into specifics about the products.
According to a wrongful termination suit filed in New Jersey
state court this week by three former managers in Prudential's
corporate investigation division, Wells Fargo employees appear
to have signed up bank customers for the Prudential policies
without the customers' knowledge or permission.
In some cases, policies were opened and closed after a month
or two and then reopened, and sometimes monthly fees were
withdrawn from the accounts, according to evidence in the
Scot Hoffman, a spokesman for Prudential Financial, said the
insurer had been monitoring its business with Wells Fargo since
last year. A customer survey had shown high lapse rates.
The insurer expanded the review of how the product was sold
after Wells Fargo was fined in September.
"We anticipate reviewing this matter with our regulators in
due course," Hoffman said in a statement.
The three managers say they were fired in November for
trying to escalate their discoveries internally within
Hoffman said they were fired for, "appropriate and
legitimate reasons that were entirely unrelated to Prudential's
business with Wells Fargo and Prudential's decision to examine
sales of the MyTerm product."
No one from Wells Fargo was immediately available to
The lawsuit and the Prudential investigation were first
reported by The New York Times.
(Reporting by Carmel Crimmins, Editing by Franklin Paul)