Wells Fargo & Co. executives were warned that an auto insurance plan could be overcharging customers four years before the bank scrapped the program, according to a complaint released by a judge this week.
Several executives, including then-General Counsel James Strother and chief auditor David Julian, were among the bank officials briefed in 2012 about possible flaws in the auto insurance program that was ended in 2016, according to parts of a class-action lawsuit that were unsealed on Monday.
A Wells Fargo official refused to comment on the allegations in the case, but said the bank is planning to repay all damaged customers.
“We are reviewing client accounts and developing a remediation plan – we hope to conclude very soon,” said spokesman Natalie Brown.
Strother, Julian and other executives mentioned in the case could not be contacted immediately. Last month, regulators warned Julian and another bank official that they might face sanctions for their work with Wells Fargo.
Wells Fargo ended the auto insurance program in September 2016, after an internal review found that many customers had been incorrectly placed in a costly product that they didn’t need.
If the Bank allowed its policies to continue, the bank had the right to force the areas of automatic debt to the so-called “collateral protection insurance borç (CPI). But ultimately, the bank said about 1 billion dollars in April, about 600 thousand customers were unnecessarily forced to the CPI, he said.
Wells Fargo initially increased rapidly since the estimated improvement efforts cost $ 64 million, but this figure owes more to the borrower. In the third quarter, Wells Fargo allocated $ 241 million for affected customers.
The auto-insurance breach is part of a larger scandal to treat Wells Fargo’s customers. More than two years ago, the bank announced that it opened millions of counterfeit accounts in customer names, without permission to hit its sales targets.
The San Francisco-based lender has since identified violations of sales in various areas from mortgage lending to wealth management.
The case was originally held in August at the Central District Court of California. Wells Fargo fought to keep some details of the case under seal.
Plaintiffs claim that their customers are demanding reimbursement for false charges and that Wells Fargo pushes drivers with weaker loans to policies more often than well-intentioned customers.
According to the case, which implies an internal bank presentation, Wells Fargo is forcing borrowers to damage more CPI insurance than those with high credit ratings.
The drivers of Tesla vehicles and other persons with high credit balances were exempted from CPI according to the case.
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