Wells Fargo Customers Allegedly Forced To Pay For Unnecessary Auto Insurance
On July 31, 2017, Bloomberg reported that customers of Wells Fargo & Co.
. . . accused the bank in a lawsuit of forcing them to pay for unnecessary auto insurance that drove some of them so far into a financial spiral that their vehicles were repossessed.
The complaint comes after a year of handwringing and internal changes brought on by an earlier snafu at Wells Fargo. Bank workers opened up possibly 2.1 million checking and credit-card accounts without customers’ permission over about half a decade, and the bank paid $185 million to regulators to settle.
Now, the bank is accused of bilking millions of dollars from “unsuspecting customers who were forced to pay for auto insurance they did not need or want,’’ pushing almost 250,000 of them into delinquency and resulting in almost 25,000 vehicle repossessions, according to a proposed class-action lawsuit filed Sunday in San Francisco federal court.
Further, Bloomberg reported that
[w]hen customers took out Wells Fargo loans to purchase vehicles, the bank and the insurance company either didn’t check whether clients already had coverage or ignored the information, according to the complaint. Collateral protection insurance policies were created for customers, and Wells Fargo then would add premium charges to customers’ auto loan bills, often without notifying them, according to the lawsuit.
Wells Fargo last week said it may have pushed thousands of car buyers into loan defaults and repossessions by charging them for the unwanted insurance. The bank said an internal review of its auto lending found more than 500,000 clients may have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own policies. The firm said it may pay as much as $80 million to affected clients — with extra money for as many as 20,000 who lost cars, “as an expression of our regret.”
Additionally, according to the Bloomberg story:
Wells Fargo last week said it would start sending letters and refund checks next month to customers with policies placed from 2012 to 2017 that it determines were harmed, and expects the process will be complete by the end of the year. The lender also promised to work with credit bureaus to amend customers’ credit records.
Did You Have A Wells Fargo Auto Loan and/or Auto Insurance Policy (2012-2017)?
If so, your rights under federal law may have been violated. If you would like to speak privately with an attorney to contribute to or learn more about the investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, negligence, false claims, deception, data breaches or whose rights to minimum wage and overtime compensation under the federal Fair Labor Standards Act and state wage and hour laws have been violated.