The Office of the Comptroller of the Currency, a federal agency charged with regulating and supervising the nation’s banks, has issued a report calling out banking giant Wells Fargo for driving “hundreds of thousands” of borrowers into buying unneeded auto insurance when they took out car loans. The preliminary and confidential report, a copy of which was obtained by the New York Times, also chastised Wells Fargo for how it handled the problems after their size and spread were first revealed.
This is yet another high-profile slamming of Wells Fargo, third-biggest bank in the U.S., whose reputation was already more than tarnished after its vast fraudulent accounts scandal affecting millions of cheated customers led to tremendous fines and the departure of the bank’s CEO. As the New York Times noted, “The comptroller’s findings could have a significant impact on the bank. The report stated that Wells Fargo had most likely underestimated how much it would cost to reimburse harmed customers. And it could force the bank to curb, or at least more closely monitor, its practices across the entire company.”
Reports first surfaced in July of 2017 indicating that Wells Fargo had charged more than 800,000 car loan customers for auto insurance they neither wanted nor needed. Charges for these false services led to nearly 275,000 of the customers falling behind on their vehicle loans, with at least 25,000 of them getting their vehicles improperly repossessed as a result.
The new report highlights the fact that Wells Fargo “had ignored signs of problems in the business such as consumer complaints, focusing instead on sales volume and performance,” all to the customers’ eventual detriment.