Wells Fargo admits to charging customers for unauthorized auto insurance

posted on:
August 2, 2017

author:
Staff

category:
Fraud

Wells Fargo is facing another major scandal, this time over revelations that it enrolled hundreds of thousands of its auto-loan customers in car insurance policies without their consent and then charged them for the unneeded coverage. Wells Fargo and National General Insurance Company allegedly stole millions of dollars from consumers through this scheme. Beasley Allen is representing those individuals who fell victim to the companies’ conduct in a class action lawsuit filed in the Federal District Court for the Southern District of New York on Monday.

On July 27, The New York Times reported that the bank engaged in its auto insurance scam starting in 2012 until July of last year, roping in at least 800,000 of its auto-loan borrowers. The audacity of Wells Fargo’s insurance scheme is further compounded by the bank’s admission that it attempted to keep the scandal under wraps until it could reimburse customers who were wrongfully charged for the insurance. Wells Fargo, however, was forced to face the music hours after The New York Times broke the story that the bank forced unneeded insurance on its auto loan borrowers.

“Wells Fargo’s business practices have once again been exposed, revealing an unprecedented fraud on consumers,” said Dee Miles, one of the team of lawyers who filed the class action lawsuit. “Their partner in this alleged fraudulent scheme was another corporate giant, National General Insurance Company, who together with Wells Fargo threw thousands of hard-working consumers into a tailspin of confusion on their bank loans by falsely accusing consumers of not having insurance, forcing charges on the consumers accounts and then delaying any attempts to rectify the confusion resulting in serious damages to the consumers,” said Miles.

According to The New York Times, “The expense of the unneeded insurance, which covered collision damage, pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions.” Several of those harmed by the sham included military service members on active duty, The New York Times reported.

According to Reuters, the Consumer Financial Protection Bureau (CFPB) has received 1,826 complaints about Wells Fargo vehicle loans or leases. Many of the customers affected by the bank’s auto insurance scam said they tried repeatedly and unsuccessfully to have the insurance charges removed.

Lawyers at Beasley Allen are continuing to investigate more potential cases involving individuals who have been affected by this bank / insurance scheme. For more information on this subject, contact Dee Miles, Lance Gould, or Leslie Pescia, lawyers in our firm’s Consumer Fraud Section, at 800-898-2034 or by email at Dee.Miles@BeasleyAllen.com; Lance.Gould@BeasleyAllen.com; or Leslie.Pescia@BeasleyAllen.com.

Sources:
The New York Times
Reuters

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