Tags: wells fargo | auto | loan | scam

Wells Fargo Auto Loan Scam to Cost It $80 Million

Image: Wells Fargo Auto Loan Scam to Cost It $80 Million
Protesters outside Wells Fargo's corporate headquarters in San Francisco. (AP Photo/Noah Berger)

Friday, 28 Jul 2017 09:17 AM

Wells Fargo's auto loan scam, the latest in the bank's scandals, will cost it $80 million to reimburse 570,000 customers charged wrongly for collateral protection insurance policies.

Wells Fargo has been engulfed in scandal since September, when it reached a $190 million settlement with regulators over complaints that its retail banking staff had opened as many as 2.1 million unauthorized client accounts, reported Reuters.

The bank had fired 5,300 employees for improper sales tactics over five years, but did not make much changes to policies and procedures, or hold managers accountable until there was a public outcry.

Wells Fargo said late Thursday it would pay back $80 million to customers wrongly charged for car loan insurance in the coming months, which included $64 million in cash and $16 million of account adjustments.

"We take full responsibility for our failure to appropriately manage the CPI program and are extremely sorry for any harm this caused our customers," said Franklin Codel, head of Wells Fargo Consumer Lending.

The bank said it had started a review of the CPI program in July 2016 and discontinued the program in September, based on the findings.

New York Times reported earlier that more than 800,000 people who took car loans from Wells Fargo were charged for auto insurance they did not need, and some of the customers were still paying for it.

About 490,000 customers had duplicate vehicle insurance coverage and about 60,000 customers did not receive complete disclosures from vendors, prior to CPI coverage, Wells Fargo said.

For about 20,000 customers, additional costs of the CPI could have led to defaults resulting in seizure of their vehicles. The bank said these customers would receive additional payments as compensation for the loss of their vehicles.

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
TheWire
Wells Fargo's auto loan scam, the latest in the bank's scandals, will cost it $80 million to reimburse 570,000 customers charged wrongly for collateral protection insurance policies.
wells fargo, auto, loan, scam
289
2017-17-28
Friday, 28 Jul 2017 09:17 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved