Shortly after having paid a total of more than $300 million in fines and settlement payments for allegedly opening fake accounts for its customers without their knowledge or consent, Wells Fargo is once again back in the spotlight for allegations of fraud.
This time the allegations are in regards to the bank’s auto lending business, which allegedly signed up and charged customers for car insurance they may or may not have needed or been made aware of. According to the class action lawsuit, most of the approximately 570,000 customers involved were not looking for a car loan from Wells Fargo, but got one anyway after they had chosen an automobile.
Wells Fargo required borrowers to maintain comprehensive car insurance, like almost any other auto loan company. Unlike other auto loan companies, Wells Fargo allegedly bought insurance for its customers who did not have comprehensive insurance, then charged them for it. Wells Fargo even admitted to buying insurance for customers who already had coverage.
National General has also been named as a defendant in the lawsuit, as it is the company from which Wells Fargo purchased insurance on behalf of the customers it deemed were underinsured (whether they were or not). The bank then charged their customers for that insurance, regardless of whether those customers could afford the insurance Wells Fargo had bought for them.
Many of the customers who were forced to pay for auto insurance they could not afford fell behind on their payments, to the point where some were forced to default on their loans, resulting in the repossession of their vehicles.
Wells Fargo apologized for the “inconvenience” some of its customers experienced as a result of these practices, and said it is in the process of notifying its customers who were harmed and “making things right.” National General has not yet commented on the lawsuit.
This latest scandal won’t do anything to help Wells Fargo’s already tarnished public image. Regulators and politicians from both parties are outraged by the bank’s apparent insistence on sucking its customers dry in order to make itself millions in profits. Democrats in both the House and the Senate are calling for a Congressional investigation into the bank, and a group of Democrats on the Senate Banking Committee have written about their concern regarding Wells Fargo’s continuing fraudulent practices and misconduct, which it compared to last year’s scandal over the false accounts the bank had opened on behalf of its customers.
While facing numerous consumer class action lawsuits against it, not to mention concern from politicians and regulators, Wells Fargo’s continued insistence that it cares for its customers are less than convincing. Adam Levitt, a partner at the law firm that is suing Wells Fargo and National General over the auto insurance scandal, pointed out that a bank that truly values its customers would not cheat and steal from them on such a consistent basis. Levitt has represented classes of plaintiffs in other large, auto-related cases, including the Volkswagen emissions lawsuit, which resulted in $16 billion in settlements.
Our Oak Brook, Illinois consumer rights private law firm handles individual and class action gift card, data breach, privacy rights, deceptive advertising, predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago consumer lawyers at Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.
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