Wells Fargo sued over car in­surance

Los Angeles Times - - BUSINESS BEAT - By Lau­rence Darmiento lau­rence.darmiento@la­times.com

Wells Fargo & Co., which is still set­tling class-ac­tion law­suits over its fake-ac­counts scan­dal, has now been hit with yet another — re­lated to the bank’s rev­e­la­tion that it charged auto loan cus­tomers for un­nec­es­sary in­surance.

An In­di­ana man who says he was wrongly charged $598 for auto cov­er­age is the lead plain­tiff in the case, which ac­cuses the San Fran­cisco bank of schem­ing with Na­tional Gen­eral In­surance Co. to “bilk mil­lions of dol­lars from un­sus­pect­ing cus­tomers.”

The law­suit, filed Sun­day in U.S. District Court in San Fran­cisco, does not name the in­surance car­rier as a de­fen­dant. It is seek­ing class-ac­tion sta­tus.

Last week, the bank said an in­ter­nal in­ves­ti­ga­tion spurred by cus­tomer com­plaints found that, from 2012 to 2017, about 570,000 bor­row­ers may have been pushed into in­surance poli­cies de­spite hav­ing their own cov­er­age. The poli­cies, so-called col­lat­eral-pro­tec­tion in­surance, are typ­i­cally is­sued by lenders af­ter a cus­tomer takes out a loan on a ve­hi­cle and does not have cov­er­age for it.

Wells Fargo said it will pay $80 mil­lion in com­pen­sa­tion to the cus­tomers, in­clud­ing some 20,000 who had their cars re­pos­sessed af­ter the in­surance charges caused them to de­fault on their loans.

Cather­ine Pul­ley, a Wells Fargo spokes­woman, de­clined to com­ment on the specifics of the law­suit.

“We an­nounced a plan to re­me­di­ate auto loan cus­tomers who may have been fi­nan­cially harmed due to is­sues re­lated to auto CPI poli­cies placed be­tween 2012-2017,” the state­ment said. “We are very sorry for the in­con­ve­nience this caused im­pacted cus­tomers, and we are in the process of no­ti­fy­ing them and mak­ing things right.”

Na­tional Gen­eral could not be reached for com­ment.

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