Program allows consumers, who have not been made whole through other remediation programs, to have inquiry reviewed by escalation team

Wells Fargo has begun a consumer redress review program through which consumers who have not yet been made whole through other remediation programs already in place can seek to have their inquiry or complaint reviewed by a Wells Fargo escalation team for possible relief, Attorney General Kathleen Jennings and other AGs announced Wednesday.

The consumer redress review program was a key component of the December 2018 settlement with the attorneys general of all 50 states and the District of Columbia to resolve claims that the bank violated state consumer protection laws by (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance guaranteed asset/auto protection (“GAP”) products, and (5) incorrectly charging customers for mortgage rate lock extension fees.

As part of the program, Wells Fargo will maintain a website that contains information regarding consumers’ eligibility for redress. Wells Fargo’s website describes the issues covered by the settlement agreement and provides escalation phone numbers consumers may use to request review. In addition, Wells Fargo will provide periodic reports to the states about ongoing remediation efforts.

Wells Fargo’s consumer redress review website may be accessed at https://www.wellsfargo.com/commitment/redress/.

Consumers with questions or concerns may call the following Wells Fargo escalation phone numbers:
Unauthorized Accounts / Improper Retail Sales Practices: 1-844-931-2273
Improper Renters and Life Insurance Referrals: 1-855-853-9638
Force-Placed Collateral Protection Auto Insurance (“CPI”): 1-888-228-9735
Guaranteed Asset/Auto Protection (“GAP”) Refunds: 1-844-860-6962
Mortgage Interest Rate Lock Extension Fees: 1-866-385-5008

Details of the states’ settlement with Wells Fargo can be found here.

Delaware Attorney General Kathy Jennings announced Friday that she and 45 other Attorneys General reached a settlement with Johnson & Johnson and its subsidiary DePuy Orthopaedics, Inc., to resolve allegations that DePuy unlawfully promoted two of its metal-on-metal hip implant devices.

Attorneys General allege that DePuy engaged in deceptive practices in its promotion of the ASR XL and Pinnacle Ultamet hip implant devices by making misleading claims as to their longevity, also known as survivorship. DePuy advertised that the ASR XL hip implant had a survivorship of 99.2 percent at three years when the National Joint Registry of England and Wales reported a 7 percent revision rate at three years. Similarly, DePuy promoted the Pinnacle Ultamet as having a survivorship of 99.8 percent and 99.9 percent survivorship at five years when the National Joint Registry of England and Wales reported a 2.2 percent three-year revision rate in 2009 increasing to a 4.28 percent five-year revision rate in 2012.

Some patients who required hip implant revision surgery to replace a failed ASR XL or Pinnacle Ultamet implant experienced persistent groin pain, allergic reactions, tissue necrosis, and a build-up of metal ions in the blood. The ASR XL was recalled from the market in 2010. DePuy discontinued its sale of the Pinnacle Ultamet in 2013.

“Accurate and up to date information for both doctors and patients is critical to effective health care,” said Attorney General Jennings. “This settlement helps ensure that doctors can continue making the most informed, medically appropriate decisions they can about patient care.”

As part of the settlement, DePuy has agreed to the entry of a cease-and-desist order that requires the company to reform how it markets and promotes its hip implants in Delaware. Under the order, DePuy shall:

• Base claims of survivorship, stability or dislocations on scientific information and the most recent dataset available from a registry for any DePuy hip implant device.
• Maintain a post market surveillance program and complaint handling program.
• Update and maintain internal product complaint handling operating procedures including training of complaint reviewers.
• Update and maintain processes and procedures to track and analyze product complaints that do not meet the definition of Medical Device Reportable Events.
• Maintain a quality assurance program that includes an audit procedure for tracking complaints regarding DePuy Products that do not rise to the level of a Medical Device Reportable Event but that may indicate a device-related serious injury or malfunction.
• Perform quarterly reviews of complaints and if a subgroup of patients is identified that has a higher incidence of adverse events than the full patient population, determine the cause and alter promotional practices as appropriate.

The total value of the settlement is $120 million. Delaware will receive $1.3 million, with the money going to the state’s Consumer Protection Fund, which funds consumer protections investigations and activities.

Deputy Attorney General David Weinstein of the Consumer Protection Unit led Delaware’s efforts on this matter.

The complete cease-and-desist order can be found here.

The investigation was led by the Attorneys General of Texas and South Carolina with an Executive Committee consisting of the Attorneys General of Florida, Indiana, North Carolina, Ohio, Pennsylvania, and Washington. Also participating in the settlement are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, and Wisconsin.

Payments Part of Resolution of Case against Autumn Park and Hidden Creek Apartment Complexes

Residents of two apartment complexes in Newark are eligible to receive some funds as a result of an action by the Delaware Department of Justice Consumer Protection Unit alleging the apartments were advertised to have amenities that they did not have or which were not operational. The owners and property manager of Hidden Creek are also prohibited in the future from renting residential apartment units anywhere in the state suffering the same types of issues.

The Consumer Protection Unit last week settled its suit, which was filed in March 2017, against Metrodev Newark, LLC, the owners of the former Autumn Park Apartments on Winterhaven Drive, Water Polo IV, L.P. the owners of Hidden Creek Commons on Hobart Drive, and the Metropolitan Management Group, Inc., the entity hired as property manager for the two complexes.

Anyone who was a tenant at Autumn Park between March 13, 2012 and June 30, 2017, or a tenant of Hidden Creek between March 13, 2012 and the present can complete a claim form at https://attorneygeneral.delaware.gov/fraud/cpu/aptset/ to receive funds as a result of the action. Tenants can also contact the Consumer Protection Unit at (302) 577-8600 or via email at consumer.protection@delaware.gov.

Prompting the consumer suit were over 80 consumer complaints filed by tenants with DOJ complaining of lack of HVAC services, faulty appliances, plumbing issues, health and safety concerns, and a lack of responsive maintenance. Both complexes had numerous code violations. Despite all this, advertising for the complexes consistently promised amenities such as free heat and hot water, air conditioning, fully equipped kitchens, and 24-hour emergency repair. The Consumer Protection Unit alleged that the failure to provide the promised amenities and services, after having repeatedly advertised their availability, were misrepresentations, false promises and omissions in violation of Delaware consumer fraud laws.

As a part of the settlement, the defendants are prohibited from renting residential apartment units in Delaware that suffer from open code or municipal health, safety, or welfare violations that were active at the time of renting a unit to a tenant. Defendants may not rent units that lack facilities or amenities as advertised or promised to the public, and are prohibited from using false or misleading advertisements. The only property currently under defendants’ ownership or control in Delaware is the Hidden Creek Commons community.

As a part of the settlement, the defendants will provide training to their staff to ensure they are knowledgeable of the requirements of the Delaware Residential Landlord Tenant Code, New Castle County Tenants and Rental Code, and state and federal fair housing laws. The defendants will also institute training for tenants to ensure that tenants are aware of their rights under the Delaware Residential Landlord Tenant Code and the New Castle County Tenants and Rental Code.

Finally, the defendants will pay a civil penalty in the amount of $400,000. These funds will be used to make payments to affected tenant consumers who complete the claim form and provide supporting documentation. Remaining funds will go to the state’s Consumer Protection Fund to repay the costs of the investigation and to fund other consumer protection activities in Delaware.

“This case was a priority of former Attorney General Matt Denn because tenants were living in conditions that were unacceptable,” Attorney General Kathy Jennings said. “I am proud of the work that DOJ has done to send the message that such misleading conduct should not be tolerated.”

This case was handled for the Consumer Protection Unit by CPU Assistant Director Gillian Andrews, Deputy Attorney General Gina Schoenberg, Special Investigators Robert Schreiber, Bruce Pinkett, and LaVincent Harris, and Paralegal Angela Williams.

Fiat Chrysler Required to Fix Vehicles, Provide Restitution and Address Environmental Harms; State Attorneys General Obtain $72.5 Million in Nationwide Civil Penalties from Fiat Chrysler and Another $98.7 Million from Bosch for its Role in Supplying and Programming the Software Used by Fiat Chrysler and Earlier Violator Volkswagen

Attorney General Kathleen Jennings and Department of Natural Resources and Environmental Control Secretary Shawn Garvin today announced that Delaware has negotiated settlements in two matters: The first settlement, when finalized, will provide for hundreds of thousands of dollars in compensation for Delaware consumers who purchased or leased Fiat Chrysler vehicles allegedly containing illegal emissions defeat devices. The second will settle claims that as a supplier of auto components, parts maker Robert Bosch allegedly supplied and helped program the illegal emissions “defeat device” software used by both Fiat Chrysler and by Volkswagen in their diesel vehicles.

“Fiat Chrysler betrayed the trust of its customers regarding the emissions of its vehicles and Bosch enabled Fiat Chrysler and Volkswagen to do so,” Attorney General Jennings said. “Consumers are being compensated through these and other settlements directly and the financial penalties being paid to the states serve as punishment and warning for companies not to engage in deceptive consumer practices.”

“With this settlement, we are holding these companies accountable for causing very real and detrimental impacts – vehicle emissions being a large part of our air quality problems,” said DNREC Secretary Shawn M. Garvin. “These settlement dollars will be used to invest in improvements in Delaware’s air quality.”

Fiat Chrysler

Following a nearly two-year investigation, Delaware and other states allege that Fiat Chrysler Automobiles N.V., its U.S. subsidiary FCA US, LLC, its Italian affiliate V.M. Motori S.p.A. and V.M. North America, Inc. (collectively, “Fiat Chrysler”) installed unlawful defeat device software and undisclosed Auxiliary Emissions Control Devices (“AECDs”) in 181 Model Year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold in Delaware. Delaware alleges that Fiat Chrysler cheated on federal and state emissions tests by calibrating the vehicles’ software to conceal that the vehicles emitted higher than permitted levels of harmful nitrogen oxides (NOx) in real-world driving conditions, and misled consumers by falsely claiming the “Eco-Diesel”-branded Jeep SUVs and Ram 1500 trucks were environmentally friendly and compliant with the law in all 50 states.

Delaware’s settlement will prohibit Fiat Chrysler from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers, and require Fiat Chrysler to carry out its obligations under a series of related settlement agreements in the Multidistrict Litigation (“MDL Settlements”) pending in the U.S. District Court for the Northern District of California. The MDL Settlements, once approved by the MDL court, will resolve claims brought by a national class of affected consumers, the United States Department of Justice and Environmental Protection Agency, and the California Air Resources Board and the State of California. The MDL Settlements require Fiat Chrysler to: eliminate the defeat device features from the relevant software through a software “flash fix”; provide eligible owners and lessors extended warranties; and, together with co-defendant Bosch, pay eligible owners who take their vehicle to an authorized dealer for the software repair an average restitution of approximately $2,908 and lessees and former owners who do so restitution of $990. They also require Fiat Chrysler to make available 200,000 upgraded catalytic converters to mitigate air pollution across the country when installed by Fiat Chrysler vehicle owners as replacements to their existing catalytic converters.

Fiat Chrysler will be required to pay Delaware more than $250,000 in civil penalties, including more than $140,000 under Delaware environmental laws for equipping, offering, selling and leasing the environmentally non-compliant vehicles, and more than $110,000 under Delaware consumer protection laws for deceptively and unfairly marketing, selling and leasing the vehicles to consumers. Nationwide, excluding the separate penalties the company will be required to pay to the federal government and California, the multistate agreement is expected to result in civil penalties totaling $72.5 million to 49 states, Puerto Rico, the District of Columbia and Guam.

If all owners and lessors nationwide participate, this will result in total available restitution of approximately $307 million, including approximately $500,000 to the 181 affected owners and lessors in Delaware.

Bosch

Bosch is a multinational engineering company well known for its consumer products. It is also a major supplier to the global automotive industry. Among the products Bosch supplies to its auto manufacturing customers are the electronic control units (“ECUs”) that house the complex software that controls nearly all aspects of an engine’s performance, including emissions systems. When Volkswagen, a Bosch customer, was revealed to have systematically utilized defeat device software in its diesel vehicles, several states, including Delaware, commenced a separate investigation into the role played by Bosch in enabling its customers to potentially violate federal and state emissions regulations. Today, after another Bosch customer, Fiat Chrysler, has settled claims that it too employed illegal defeat devices, Delaware is able to announce the conclusion of that separate investigation into Bosch’s conduct.

Delaware alleges that Bosch facilitated the implementation of the defeat device software in more than 600,000 Volkswagen and Fiat Chrysler vehicles over a period that spanned more than a decade. Notwithstanding concerns about the illegality of the devices raised internally, to management, and externally, to Volkswagen and Fiat Chrysler, Delaware alleges that Bosch continued to assist these customers as they implemented the defeat devices and concealed their misconduct from regulators and the public.

Under the terms of the proposed settlement with Delaware, Bosch will pay Delaware more than $340,000 to settle the State’s consumer and environmental claims. The agreement also includes precedent-setting injunctive terms and requires Bosch to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software.

Under a multistate agreement involving Delaware and 49 other jurisdictions—including Puerto Rico, the District of Columbia, Guam and all states other than California, Texas and West Virginia—Bosch will pay a total of $98.7 million in civil penalties under the jurisdictions’ consumer protection and environmental laws and make a separate $5 million payment to the National Association of Attorneys General (NAAG) for training and future enforcement purposes. Under the related MDL Settlements, Bosch will also pay approximately $27.5 million to consumers who purchased or leased the affected Fiat Chrysler vehicles. Bosch earlier paid more than $275 million to consumers who purchased or leased the affected Volkswagen vehicles.

These matters were handled for Delaware by state Department of Justice Director of Consumer Protection Christian Douglas Wright and Deputy Attorney General Valerie Edge.

Agreement resolves state consumer protection claims for alleged unfair and deceptive trade practices involving millions of accounts

Under a settlement filed December 28, 2018 with all 50 states and the District of Columbia over violations of state consumer protection laws, Wells Fargo Bank N.A. will create a consumer redress review program through which consumers who have not been made whole through other restitution programs already in place can seek review of their inquiry or complaint by a bank escalation team for possible relief.

The settlement resolves allegations by Delaware and other state attorney general offices that Wells Fargo violated state consumer protection laws by (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance products, and (5) incorrectly charging customers for mortgage rate lock extension fees.

The Delaware Department of Justice Consumer Protection Unit, which joined in the investigation and settlement, said any Delawarean who was or currently is a customer of Wells Fargo and experienced any of the above issues, will be able to utilize a dedicated website that will go live in late February 2019 to take steps to be compensated. Delaware DOJ will provide an update for consumers once more information concerning consumer redress is made available. The consumer redress process will be overseen by the federal Office of the Comptroller of the Currency and the federal Consumer Financial Protection Bureau.

The Dec. 28 settlement represents the most significant engagement involving a national bank by state attorneys general acting without a federal law enforcement partner. In addition to the consumer restitution, as part of the settlement, Wells Fargo will pay a total of $575 million to the states and D.C.

In addition to the settlement with the states, Wells Fargo previously entered consent orders with federal authorities, which include restitution to consumers in excess of $600 million. Further, the bank settled a related consumer class-action lawsuit, and will pay over $1 billion in civil penalties to the federal government. Additionally, under an order from the Federal Reserve, the bank is required to strengthen its corporate governance and controls, and is currently restricted from exceeding its total asset size.

Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, and debit cards were issued without the customers’ knowledge or consent. The bank has also identified 528,000 online bill pay enrollments nationwide that may have resulted from improper sales practices at the bank. In addition, Wells Fargo improperly submitted more than 6,500 renters insurance and/or simplified term life insurance policy applications and payments from customer accounts without the customers’ knowledge or consent. The states alleged that Wells Fargo imposed aggressive and unrealistic sales goals on bank employees that created an impetus for employees to engage in improper sales practices.

The states also alleged that Wells Fargo improperly charged premiums, interest, and fees for force-placed collateral protection insurance to more than two million auto financing customers, despite evidence that the customers’ regular auto insurance policy was in effect. Additionally, the states alleged that Wells Fargo failed to ensure that customers received proper refunds of unearned portions of optional Guaranteed Asset/Auto Protection (GAP) products sold as part of motor vehicle financing agreements.
Finally, the states alleged that Wells Fargo improperly charged residential mortgage loan consumers for rate lock extension fees even when the delay was caused by Wells Fargo, a practice contrary to the bank’s policy.

Beyond the direct consumer relief, Delaware’s share of the $575 million Wells Fargo will pay to the states and DC as part of the settlement is just over $2 million, which will go to the state’s Consumer Protection Fund. The Fund pays the investigative costs, consumer outreach activities and operations of Delaware DOJ’s Consumer Protection Unit, with excess amounts returned to the state’s General Fund for allocation by the state legislature and Governor through the normal process.

Please click here to view the states’ agreement with Wells Fargo.