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California to Probe Wells Fargo in Auto Insurance Abuse
California’s insurance commission is launching an investigation into Wells Fargo & Co. for burdening their auto loans with auto insurance they didn’t ask for.
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California’s insurance commission is launching an investigation into Wells Fargo & Co. for burdening their auto loans with auto insurance they didn’t ask for.
Last week Wells Fargo acknowledged its Collateral Protection Insurance program wrongly charged some 570,000 customers nationwide for car insurance between 2012 and 2017. The bank says the bogus fees contributed to about 20,000 vehicle repossessions from buyers who couldn’t afford the higher monthly payments that resulted.
Wells Fargo, already in deep regulatory trouble for secretly creating 2.1 million accounts in customers’ names, has agreed to pay back $80 million to borrowers affected by the insurance scheme.
California says it also will investigate National General Insurance Co., which participated in the bank’s program. Reuters notes that last week New York state announced a similar probe into the Wells Fargo plan.
The bank ended the program last September, acknowledging in a tone-deaf statement that it found “inadequacies in vendor processes and our internal controls that negatively impacted some customers.”
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