Wells Fargo sued over car insurance
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.