Prudential Financial Inc. on Monday said it would suspend distributing insurance policies through Wells Fargo & Co., following the sales-practices scandal that hit the San Francisco bank.
Prudential’s PRU, -1.41% decision comes as Wells Fargo WFC, -2.38% continues to deal with the fallout from the sales tactics scandal this fall. Federal regulators and the Los Angeles City Attorney’s office announced in September that Wells Fargo opened as many as 2.1 million deposit and credit-card accounts without customers’ knowledge. The company was slapped with a $ 185 million fine for “widespread illegal” sales practices, and John Stumpf stepped down as chief executive.
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Prudential said it was reviewing how Wells Fargo’s sales practices affected the sales of its MyTerm life insurance policy, which it agreed in 2014 to sell to Wells Fargo customers through self-service kiosks in Wells branches as well as through its website.
A Wells Fargo spokesman said it is working with Prudential to investigate any unauthorized or inappropriate referrals that may have occurred. The spokesman, Mark Folk, added that the bank is suspending sales and referrals of the MyTerm product until the investigation is concluded.
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