Prudential May Charge Wells Fargo as Fake-Account Fallout Spreads to Other Business Lines

Wells Fargo's sales practices are being scrutinized on multiple fronts after authorities fined the bank $185 million in September for signing customers up for bank accounts and credit cards without permission. On Wednesday, ProPublica said the firm placed the head of a mortgage-lending unit in Los Angeles, Tom Swanson, on leave while examining allegations some customers were charged to lock in low interest rates when the bank delayed applications.

Prudential suspended MyTerm sales through Wells Fargo in December ... 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.

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ProPublica raised the separate concern about Wells Fargo's mortgage practices last month. Some branches in Los Angeles and Oregon broke with the company's policy of eating fees to lock in low interest rates when it was at fault for delays in mortgage applications, the publication said in its report on Wednesday, citing current and former employees. Swanson didn't respond to a message seeking comment.

Wells Fargo is conducting an internal review to ensure it handled rate-lock extensions consistently and with "customers' best interests in mind," company spokesman Tom Goyda said, declining to comment on Swanson. "While that process has not been completed and we can't discuss the results, we want this review to be comprehensive." The firm may take additional steps and "make things right for customers" as warranted, he said.