State Law

According to regulators, some telemarketers with accounts at Wachovia called consumers and offered them items such as medical-discount plans or vouchers for discount travel and groceries. They then used a remotely created check to withdraw funds from customers' accounts.

The Office of the Comptroller says a large percentage of consumers said the checks were never authorized or that they never received the products or services offered by the telemarketers.

The settlement follows an 18-month investigation.

"This situation was unacceptable and we regret it happened. We will work diligently to provide restitution to consumers affected by the situation and to educate consumers," Wachovia says in a written statement. "Wachovia is pleased to have resolved this matter with the OCC."

Wachovia says it doesn't believe the settlement will have an adverse effect on its financial condition.

Wachovia has not admitted any wrongdoing. The bank will pay up to $125 million in claims, $8.9 million toward consumer-education programs for the elderly and a $10 million fine.

Charlotte, N.C.-based Wachovia (NYSE: WB) acquired St. Louis-based A.G. Edwards Inc., a financial services holding company, in a $6.9 billion deal that closed Oct. 1. It creates a combined securities firm, to be based in St. Louis, with $1.1 trillion in client assets, nearly 15,000 brokers and 1,500 retail brokerage offices.