Last year’s scandal for Wells Fargo was the revelation that over 1.5m people were victims of fraud by overzealous employees, trying to hit quotas.
Yesterday we learned that a new fraud had been thrusted upon the Wells Fargo customer base, this time in the form of unneeded auto insurance. You’ve got to love their vigor.
To be clear, this sordid brand of fraud was perpetuated from 2012-2016.
Source: The Failing Ny Times
More than 800,000 people who took out car loans from Wells Fargo were charged for auto insurance they did not need, and some of them are still paying for it, according to an internal report prepared for the bank’s executives.
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, according to the 60-page report, which was obtained by The New York Times. Among the Wells Fargo customers hurt by the practice were military service members on active duty.
“We have a huge responsibility and fell short of our ideals for managing and providing oversight of the third-party vendor and our own operations,” Franklin R. Codel, the head of consumer lending at Wells Fargo, said in an interview. “We self-identified this issue, and we made the right business decisions to end the placement of the product.”
The estimated damage by this foray into the bank accounts of their customers is estimated to be in the ballpark of $73 million – also known as ‘chicken scratch’ for Wells.
State insurance regulations required Wells Fargo to notify customers of the insurance before it was imposed. But the bank did not always do so, the report said. And almost 100,000 of the policies violated the disclosure requirements of five states — Arkansas, Michigan, Mississippi, Tennessee and Washington.
Wells Fargo took issue with some of the figures in its own report. In a statement, Jennifer A. Temple, a bank spokeswoman, said the bank determined only 570,000 of its customers may qualify for a refund and that just 60,000 customers in the five states had not received complete disclosures before the insurance placement. Finally, she said, the bank estimated the insurance may have contributed to 20,000 wrongful repossessions, not 25,000.
“We take full responsibility for these errors and are deeply sorry for any harm we caused customers,” Ms. Temple added.
As you can see, Wells Fargo is going to ‘take responsibility’ for getting caught for their new crimes. Refunds will be made and people will be fired. Also, they’ll likely enact a new share buyback program to support the stock price.
Alas, the stock is barely changed — chin up olde sport.
NYC Comptroller, Scott Stringer, is pissed off and wants action.
“This is a full-blown scandal — again. It’s unbelievable, outrageous, sad, and yet quintessential Wells Fargo. This isn’t just a corporate debacle. It’s caused real human harm. It’s reflective of a system that Americans feel is rigged against the little guy, and sadly symbolic of a culture that puts short-term profits ahead of creating sustainable value for shareowners. Everyday families have suffered and tens of millions of hard-earned dollars were stripped from unsuspecting Americans, many of whom are struggling just to get by. In the end, shareowners ultimately suffer the long-term consequences.
“We need accountability and we need it now. Investors have long said this board needs to change, and these new revelations only reinforce that urgency. Wells Fargo must immediately jumpstart this process by replacing Chairman Stephen Sanger with a new independent chairperson. Investors, as well as consumers and everyday Americans, have waited too long for accountability. This board needs to be overhauled — now.
“The Wells Fargo board must also immediately disclose to investors the circumstances of this new scandal. We need to know what the board knew and when it knewd it and how executives are being held accountable. While we appreciate that these findings emanated from a report the company itself launched, full transparency and accountability are non-negotiable.”
Yawn.
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Those fuckers charge me for hazard insurance out of the blue I don’t need. Been fighting that for 3 years.
People are used to it by now. If 2007/09 didn’t make you change Banks, not much will. I mean if I were a Wells customer and this story broke, if I wasn’t affected, I wouldn’t go thru the hassle of switching my Bank (even though it’s easy as pie).
And the people who did get suckered, are broke anyway in all likelihood or don’t have enough money for a big bank to give a FTK about anyway.
So adios.
Sad but really, nobody cares about this than then do that Timmy squashed a bug this morning.
2nd the Yawn
Bush was the new Sherriff in town, he was supposed to clean all this shit up.
Clinton was the new Sherriff in town, he was supposed to clean all this shit up.
Bush was the new Sherriff in town, he was supposed to clean all this shit up.
Obama was the new Sherriff in town, he was supposed to clean all this shit up.
But now that we have a new Sherriff in town that is cleaning all this shit up, folks complain.
Um, this happens every day when people pay for rental car collision insurance and already have their own auto insurance. The rental-car insurance would never pay in case of an accident because your private insurance is charged first.
Complete scam and completely legal.
Dude, this WFC thing is different than your rental car anecdote.
“State insurance regulations required Wells Fargo to notify customers of the insurance before it was imposed. But the bank did not always do so, the report said. And almost 100,000 of the policies violated the disclosure requirements of five states — Arkansas, Michigan, Mississippi, Tennessee and WaAbington.” At least the rental car companies ask if you want the insurance. You can always turn it down.
*Washington
Two words… credit union. Even the brokest person can find one to join … if you can get loan with WF you can get one with a CU
One word – Warren Buffett. Ok, one name.
“We fell short of our ideals” that’s a laugh. I’m pretty sure there are no standards to be ideal about. This is a mega corporation that doesn’t care about most people.
The same people that bank there are the same people who elect the same old politicians running Washington. And we wonder why it doesn’t change.
Yet another reason why Sarbanes Oxley is a dumb fucking law….it hasn’t stopped shit.