Internal Memo Reveals Widespread Unethical Auto Loan-Related Insurance Practices at Wells Fargo
In the past few years, the behemoth banking giant Wells Fargo has become almost synonymous with systematic fraud targeting the bank’s own customers, and, just when it seemed no more news of misdeeds might emerge, the New York Times has reported that an internal report at the bank reveals years of practices of opening unauthorized insurance policies for customers who took out auto loans with the bank. All in all, the internal memo indicates that Wells Fargo created insurance policies for 570,000 customers who took out automobile loans with the bank but did not request the insurance policies, which, by the bank’s own words were “considerably more expensive than insurance (customers) can obtain on (their) own.” In addition to automatically charging customer accounts for auto insurance policies they did not request – which were often duplicative and not removed even when customers repeatedly requested the bank to do so – the policies caused 270,000 customers to be charged overdraft fees and over 20,000 customers to have their cars repossessed, with some being charged thousands in fees as a result.
Wells Fargo Refused to Cancel Policies Even After Complaints
According to the New York Times article summarizing the internal report, Wells Fargo engaged in a systematic practice of automatically creating an insurance policy in a new car loan borrower’s name by searching an index to determine whether the borrower had an existing policy and then creating the policy if the results were negative.
Not only did this mean that hundreds of thousands of borrowers were signed up for car insurance policies – which, again, by the bank’s own admission were far more expensive than policies otherwise easily available to drivers – but the bank’s search practices were clearly flawed, as thousands of consumers complained that they did indeed already have policies in place. Even when customers called to complain and have the policies removed, the bank continued to charge them premiums in many instances.
When a person’s account was charged with the surprise fee for insurance, many experienced overdrafts, with many borrowers having their car repossessed as result.
Military Veterans Among Those Most Injured by Wells Fargo Insurance Practices
The report indicates that active duty military service members are among those most affected by the bank’s systematic practices of placing policies on their cars and automatically charging their accounts without their knowledge.
As the article points out, Wells Fargo also recently settled with federal regulators by agreeing to pay a $4 million for illegally repossessing the cars of active duty service members. According to the Department of Justice, the bank illegally repossessed one service member’s cars as he was deploying to Afghanistan and sold it at public auction, then sued the service member’s family for the balance on the car.
What to Do If You’ve Been Affected by Wells Fargo Practices
If you are one of the 570,000 or more Wells Fargo customers targeted by the bank’s systematic efforts to raise corporate profits (the bank is currently valued at $265 billion) through using deceptive tactics to automatically place unwanted and unnecessary insurance policies on your car, the complex litigation attorneys at McCune Wright Arevalo are here to help. Wells Fargo’s too little too late offer to return $80 million to these customers does not cover the losses or properly penalize Wells Fargo.
Long before Wells Fargo made national news in 2016 for opening millions of unauthorized accounts, the class action attorneys of McCune Wright Arevalo had successfully taken on the banking giant and won for consumers across California by obtaining a $203 million judgment against Wells Fargo on behalf of California banking clients in 2010 in connection with the bank’s overdraft practices. Our attorneys are now preparing to use that success and knowledge of Wells Fargo culture and practices to force Wells Fargo to fully compensate customers for its illegal and unethical practices, and we look forward to obtaining justice on your behalf. Contact the office of McCune Wright Arevalo, LLP today to determine your options for financial recovery.