Wells Fargo Customers Sue Bank for Unnecessary Auto Insurance and Repossessions

August 1, 2017, Written By John H. Oldshue
Wells Fargo Customers Sue Bank for Unnecessary Auto Insurance and Repossessions

Wells Fargo is facing yet another lawsuit—this time accusing the company of charging customers for unauthorized or unnecessary auto insurance. The class action was filed in San Francisco on Sunday, and seeks an undisclosed amount of damages.

The lawsuit claims that Wells Fargo charged customers for auto insurance if they had an auto loan with the bank. This is a standard practice for uninsured drivers because it protects the bank in the event of an accident. However, Wells Fargo was allegedly charging customers even if they had their own insurance. This resulted in 250,000 delinquent payments and 25,000 repossessions.

Late last week, Wells Fargo said it would potentially refund $80 million to the 570,000 customers affected by this, and would provide extra money for people who lost their vehicles.

Roland Tellis, the attorney representing the plaintiffs in this case, says that a simple refund isn’t enough. “Refunds don’t address the fraud or inflated premiums, the delinquency charges, and the late fees. It will be up to a jury or court to decide the appropriate remedy.”

The lead plaintiff in the case is Paul Hancock from Indianapolis. He said he repeatedly told Wells Fargo that his vehicle was insured through Allstate, but the bank still charged him $598 for insurance. They also charged him a late fee for non-payment.

Wells Fargo spokeswoman Catherine Pulley said in an email, “We are very sorry for the inconvenience this caused impacted customers and we are in the process of notifying them and making things right.”

Wells Fargo is still working through the lawsuit regarding more than two million unauthorized credit card and bank accounts created by bank employees. Earlier this month, a federal judge approved a $142 million settlement for that case, which is scheduled for a final hearing in January 2018.

The information contained within this article was accurate as of August 1, 2017. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

About John H. Oldshue

John Oldshue is the creator of LowCards.com. He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for LowCards.com.
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