Wells Fargo, one of the nation’s largest banks, has been implicated in yet another scandal. This time it involves allegations of racketeering and fraud against customers who financed their vehicles through the mega bank, only to be rewarded with hidden (and allegedly fraudulent) auto insurance fees.
A report in the New York Times reveals that more than 800,000 people with car loans through the beleaguered bank were charged for auto insurance they did not need, want, or request. When asked about the issue, Wells Fargo confirmed the improper insurance practices.
According to the article, the unnecessary insurance “pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions.” Some of the customers affected by the scam were active duty military service members.
What Happened? Wells Fargo Forced Auto Insurance Policies Explained
The scam also involved National General Insurance, the underwriter of the policies. Wells Fargo shared borrowers’ information with National General, who automatically placed the insurance on the customers. It was left up to the consumer to notify Wells Fargo that they were being charged for insurance they never requested, even if they already had their own policies.
In many complaints reported to the Consumer Financial Protection Bureau, consumers confirmed the details of the Wells Fargo auto insurance scam, alleging that they attempted on multiple occasions to have the bank remove the extra charges without success.
Other customers appear to have never identified the problem to Wells Fargo. Since they weren’t properly informed, they may have not have even known that they were being overcharged by the bank. Many consumers’ bills were automatically deducted from their bank accounts, so without being informed by the bank, they likely did not see or notice the additional charges.
Wells Fargo: A History of Mistreating Customers
The new scandal comes on the heels of numerous other Wells Fargo missteps, including the creation of bank accounts and credit cards that customers never requested, as well as improper adjustments that were made to customers’ home loans after bankruptcy.
Baron & Budd shareholder Roland Tellis recently helped to obtain a $50 million settlement against Wells Fargo for overcharging hundreds of thousands of homeowners for appraisals.
The bank has also come under fire in recent months for mistakenly releasing clients’ private data, requiring employees to work overtime without proper compensation, and trying to get around lawsuits that hold them accountable by forcing customers into private arbitration.
“It deeply troubles me that eroding regulations and arbitration clauses have caused the banks to callously view their customers as targets for one profit driven scheme after another,” said Tellis.
How to Fight Back Against Wells Fargo
If you or someone you know obtained a car loan from Wells Fargo and were charged for unnecessary or unwanted auto insurance as a result, you may be entitled to compensation. Contact the class action attorneys at Baron & Budd now to discuss your legal options and potential Wells Fargo lawsuit.