CPR: Wells Fargo’s hopes that a $142 million June settlement of a class-action lawsuit over its agents creating up to 2.1 million unwanted checking, savings and credit-card accounts from 2011 to 2015 would end the iconic California company’s headaches have been dashed with a new report of a similar scandal involving auto loans and insurance.
The New York Times broke the story after obtaining an internal audit that showed more than 800,000 people who took out vehicle loans from the San Francisco-based banking giant “were charged for auto insurance they did not need, and some of them are still paying for it … . 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.”
Wells Fargo executives interviewed by the Times vowed to fully reimburse anyone adversely affected by its policy, but another class-action lawsuit with a massive payout seems likely. While bank executives suggested they deserved credit for having “self-identified” the problem, the size of the scandal seems likely to have a far-reaching effect on a company that has gone from being a stock analyst darling for its considerable long-term growth to a symbol of a banking industry seen as villainous by many Americans for its role in the economic meltdown that began in 2007.
In the previous scandal, besides the class-action payout, the company was fined $185 million by federal regulators in September 2016. CEO John Stumpf abruptly resigned soon afterward, voluntarily giving up $41 million in bonuses he was scheduled to receive. MORE
Sounds like they have the same flimflam artists running the show as before. Shareholders are getting hosed.
Criminals!
I have trouble understanding how none of the customers noticed this happening. Not even a few? I sure knew the amount I was paying when I had a car loan.
Not a chance that I’ll ever do business of any kind with them.
They shoulda stuck to running stagecoaches.
Dindunuthins dinduduediligence on the loans they took out?
White collar crime conducted in the open. They must have some politicians in their pockets.
I fired WF’s ass when they started jacking up everyone’s escrow payments aboyt 15 years ago. I eventually got may money back but it took way too long. I’ll never do business with them again. Also, I ain’t too happy with bank of America.
Warren Buffet has become a flim-flam artist.
@Anon – “…has become…” is the wrong tense. “…has been for years…” is more like it.
Berkshire Hathaway owns multiple companies in the manufactured home bidniss, including Clayton and Vanderbilt. There have been several investigative reports about Buffett’s really ugly predatory sales and lending practices, and here are a couple from ZeroHedge and LibertyBlitzkrieg from a few years ago. Nasty stuff indeed.
LibertyBlitzkrieg 2015-04-05
2015-12-27
LibertyBlitzkrieg 2015-04-05
Oops. I screwed up the links. I’ll try to do better…
LibertyBlitzkrieg 2015-04-05
ZeroHedge 2015-12-27
If they, Wells Fargo and other big banks, just pay a fine they will keep on doing their dastardly deeds. Send these assholes jail, for a long time. Then revoke their banking charters.
Giddyup!!!!
Wells Fargo is rated the number 1 Anti Gun Bank. Ironic since they stole the name of an icon of the west.
Most lending institutions will automatically attach insurance coverage to collateral (in this case, the vehicle) if no proof of insurance is provided by the borrower. It is in the text of the loan document, so they are usually not obligated to inform the borrower, though my credit union does send out a notice, eventually.
Often, some fault lays with the borrowers insurance company for not sending the account information in a timely fashion. Ultimately, it is the responsibility of the borrower to make sure that the pertinent information is supplied, as well as to check their loan statement every month to make sure everything is as it should be.
If Wells Fargo had an internal problem in processing proofs of insurance and they neglected to correct it for months or years, then they, plainly, were purposefully stealing money from their clients.
I no longer consider the New York Times to be a trustworthy source of information, so I will not pass judgement until there is corroborating evidence.
Just as with Facebook, I was only a customer wt Wells Fargo for a very short time. My nose is sensitive to rat feces.
The name should be changed to Wells Fargo Bunko.
March 31, 2016 they lit up their Charlotte NC building in the transgender flag colors.
Company is a complete farce! Senior management is a joke.
I hate WF, went to refi my VA loan, offered 4.25 on my 180m refi.
Freedom gave me 2.50. Now, that was last year when rates were low.