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Features/Scandals

Prudential May Press Wells Fargo on Fake-Account Costs

February 22, 2017

[Prudential Newark HQ / Wikimedia Commons]

 

Prudential Financial, the insurer that’s facing regulatory scrutiny and lawsuits over its sales relationship with Wells Fargo, may push the bank to cover costs tied to their botched partnership.

 

The insurer in December suspended sales of the MyTerm life coverage through Wells Fargo after the lender settled a government probe into the practice of signing up customers for credit-card and savings accounts without their permission.

 

The MyTerm program offered coverage with relatively low death benefits for people who might not otherwise buy policies and was available at kiosks in Wells Fargo branches or online using the bank’s accounts, former Prudential employees said in a lawsuit.

 

That case, in which the ex-workers say they were fired for blowing the whistle on misconduct, is one of several Prudential headaches from the Wells Fargo relationship. The insurer is also facing a suit from a customer seeking class-action status. And regulators from New Jersey and California have announced probes.

 

Prudential is responding to requests from regulators, according to the filing. The company previously said that the dismissal of former employees was unrelated to the Wells Fargo relationship. The insurer said last year that it would reimburse customers who were charged for insurance that they didn’t want.