State investigating Wells Fargo anew
August 8, 2017
• Probing if auto loan customers were forced to take insurance
• “These most recent revelations by Wells Fargo are particularly troubling”
If there were such a thing as “return on mistakes,” Wells Fargo could be at the top of the class.
Now the state of California is investigating the San Francisco financial company -- again.
California Insurance Commissioner Dave Jones on Tuesday ordered the Department of Insurance to open an investigation into recent allegations that Wells Fargo and National General Insurance improperly charged consumers for "force-placed" or "lender-placed" auto insurance for consumers who had auto loans with Wells Fargo.
In a July 27 news release, Wells Fargo admitted the company failed to properly manage the program and announced the company was taking steps to refund and compensate consumers affected by the improperly placed insurance and assisting with correcting those consumers' credit reports, which were negatively impacted by the force or lender-placed insurance.
"These most recent revelations by Wells Fargo are particularly troubling," says Mr. Jones. "The department will investigate fully to determine the extent to which California consumers were affected by improper placement of force or lender-placed auto insurance and seek corrective action and penalties in the event that California's consumer protection laws were violated."
Force-placed or lender-placed insurance refers to insurance a lender requires a borrower to purchase by signing up the borrower for the insurance to cover the vehicle in case the borrower fails to get their own insurance or allows their auto insurance to lapse.
Among earlier investigations, some still ongoing, Wells Fargo has been:
• Accused by the California Department of Insurance of signing consumers up for life insurance without their consent;
• Grilled by congressional committees;
• A Justice Department investigation into two million phony accounts;
• The Securities and Exchange Commission at the behest of Democratic Senators into possible financial disclosure problems;
• The Labor Department into allegations of retaliation against whistleblowers;
• The Comptroller of the Currency, which fined the bank $24 million for improper repoing cars owned by service members;
• A $400,000 fine assessed by the Commodity Futures Trading Commission;
• California state Treasurer John Chiang’s accusation of abuse of customers;
• The governing body for New York City’s subway system.
And that’s not including the bank’s own internal investigations.