Wells Fargo Sued in Yet Another Public Embarrassment
The assault on the Wells Fargo brand continues, with a lawsuit accusing the bank of pushing almost 250,000 of its clients into delinquency by forcing them into auto insurance they didn’t need — or even ask for, Bloomberg reports.
The bank allegedly made millions of dollars off unsuspecting clients, according to the proposed class-action lawsuit filed in San Francisco federal court and cited by the newswire.
Wells Fargo allegedly didn’t check whether its clients taking out auto loans already had auto insurance, or ignored the fact that they did, Bloomberg reports. The bank then allegedly created collateral protection insurance policies for the clients and added premium charges on top of the auto loan, often without telling the clients, according to the lawsuit cited by the news service.
In addition to the clients being apparently forced into delinquency, Wells Fargo’s scheme allegedly led to almost 25,000 car repossessions, Bloomberg writes.
In the suit, Indianapolis consumer Paul Hancock accuses the bank of sharing commissions on policies from National General Holdings Corp., which isn’t named as a defendant in the suit, according to the news service. But the New York Times reported that Wells Fargo had stopped sharing commissions on insurance products back in 2013, Bloomberg writes.
Wells Fargo tells the news services in an emailed statement that it’s “making things right” and is sorry “for any inconvenience.” It also tells Bloomberg that it had ended the insurance program last September. A National General rep declined comment to the news service, meanwhile.
Wells Fargo took a major hit to its reputation last year following revelations that its bank employees opened up to two million bogus accounts without customers’ knowledge, for which the bank paid a $185 million fine.
Just last week, meanwhile, the bank had to get the courts involved to plug an accidental leak of the private information of thousands of Wells Fargo wealth management clients.