This Major Bank Might Be Charging You For Insurance You Didn't Buy

July 31, 2017Jul 31, 2017

On Sunday, a class action lawsuit was filed against Wells Fargo & Co for racketeering violations and fraud. The bank recently admitted to charging several hundred thousand borrowers for auto insurance they didn’t even ask for reports Reuters. This causes many people to have delinquencies.

“The proposed class action filed on Sunday in San Francisco federal court deepens the fallout from the latest bad practice at Wells Fargo,” says Reuters referring to a scandal where employees created 2.1 million unauthorized customer accounts to meet their sale goals.

Wells Fargo has to refund people $80 million dollars to approximately 570,000 people who were wrongly charged for auto insurance. This includes about 20,000 people who had their vehicles repossessed.

The New York Times reported on Friday that the unneeded insurance “pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions, according to the 60-page report.”

The bank said they halted the charges last September after customers brought them to their attention, but the lawsuit is saying refunds alone isn’t enough.

"Wells Fargo has long lost the right to decide what is best for its customers," Roland Tellis, a lawyer for the plaintiffs, said in an interview.

Roland pointed out that the refunds aren’t enough because they don’t address the fraud, inflated premiums, delinquency charges, or late fees that the fraud caused.

"It will be up to a jury or court to decide the appropriate remedy,” said the lawyer.

Paul Hancock, a 34-year-old marketing consultant from Indianapolis, leads the lawsuit because of the negative impact it had on his life.

“Wells Fargo charged him $598 for insurance though he repeatedly told the bank he had coverage from Allstate, and imposed a late fee after the unnecessary policy took effect,” reported Reuters.

The lawsuit is seeking unspecified damages associated with the fraud. These damages could be tripled under federal racketeering law.

Tellis, the lawyer, said, "If refunding premiums was just the start, this could be a nine-figure case.”

Wells Fargo had no comment on Monday. This isn't the first issue Wells Fargo has run into. They had a scam earlier in the week.

Next: If You Bank at Wells Fargo, You Need to Protect Yourself From this New Fraud ScamJul 28, 2017