Friday, July 28, 2017

Wells Fargo: Insurance Fraud

Is there any kind of criminal activity Wells Fargo didn't engage in the past decade or so?

More than 800,000 people who took out car loans from Wells Fargo were charged for auto insurance they did not need, and some of them are still paying for it, according to an internal report prepared for the bank’s executives.
The expense of the unneeded insurance, which covered collision damage, pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions, according to the 60-page report, which was obtained by The New York Times. Among the Wells Fargo customers hurt by the practice were military service members on active duty.
Wells Fargo, one of the largest banks in the United States, is struggling to repair its image after a scandal in which its employees created millions of credit card and bank accounts that customers had never requested. That crisis, which came to a head last year, toppled Wells Fargo’s chief executive and led to millions of dollars in fines.
But no jail time for upper management.
The bank also stands accused of having made improper adjustments to the terms of the home loans of customers who were in bankruptcy, which Wells Fargo denies.

Asked about the findings on auto insurance, Wells Fargo officials confirmed that the improper insurance practices took place and said the bank was determined to make customers whole.
LOL. What.
“We have a huge responsibility and fell short of our ideals for managing and providing oversight of the third-party vendor and our own operations,” Franklin R. Codel, the head of consumer lending at Wells Fargo, said in an interview. “We self-identified this issue, and we made the right business decisions to end the placement of the product.”
Self-identified. It's like kid who's about to be ratted out for cheating, going to the teacher, confessing, and saying "clearly I fell short of my ideals, but self-identifying should make us good, right?" Or the bank robber about to be busted doing the same. Or the (fill in the criminal thuggery blank).

Not only were the customers not being told of this "additional insurance," but states whose own laws mandate customers be told of such a thing weren't told either.
State insurance regulations required Wells Fargo to notify customers of the insurance before it was imposed. But the bank did not always do so, the report said. And almost 100,000 of the policies violated the disclosure requirements of five states — Arkansas, Michigan, Mississippi, Tennessee and Washington.
Wells Fargo took issue with some of the figures in its own report. In a statement, Jennifer A. Temple, a bank spokeswoman, said the bank determined only 570,000 of its customers may qualify for a refund and that just 60,000 customers in the five states had not received complete disclosures before the insurance placement. Finally, she said, the bank estimated the insurance may have contributed to 20,000 wrongful repossessions, not 25,000.
“We take full responsibility for these errors and are deeply sorry for any harm we caused customers,” Ms. Temple added.
Uh, no, Jen, these weren't "errors," they were crimes. Again from my analogy above: it's like the kids who cheated saying "I take full responsibility for this error and am deeply sorry for any harm I've caused the class." Or the bank robber. Or the (fill in the criminal thuggery blank).
Requiring borrowers to be insured is common in the mortgage arena, where banks expect customers to carry enough homeowners’ insurance to protect the property backing their loans. The term for the practice is “lender-placed insurance.” Pressing such insurance on auto borrowers, however, is not as common: Representatives of Bank of America, Citibank and JPMorgan Chase said they did not offer the policies, though some smaller banks do.
Kind of ironic, isn't it? "Lender-placed insurance" for mortgages is mandated by law and perfectly acceptable. And states also mandate, by law, that drivers be insured before being allowed to purchase a tag or obtain a license. 

But mandatory health insurance? Why, gasp, that's socialism! Communism! Obama!
Here is how the process worked: When customers financed cars with Wells Fargo, the buyers’ information would go to National General, which was supposed to check a database to see if the owner had insurance coverage. If not, the insurer would automatically impose coverage on the customers’ accounts, adding an extra layer of premiums and interest to their loans.
When customers who checked their bills saw the charges and notified Wells Fargo that they already had car insurance, the bank was supposed to cancel the insurance and credit the borrower with the amount that had been charged.
The Oliver Wyman report indicated that many customers appear not to have notified Wells Fargo of the redundant insurance. This may have been because their payments were deducted automatically from their bank accounts and they did not spot the charges.
Wells Fargo was also aggressive in repossessing vehicles: Some customers endured multiple repossessions, the report said.
Nice. Repossessing homes, repossessing vehicles, garnishing people's accounts, identity theft, bilking people's credit lines...Christ, the Mob isn't even that good.

And to reiterate one more time for the addled out there: not one single person from Wells Fargo ever went to prison for any of these crimes (you can read here how long I've been writing about the WF mafia). Not one. And while several low-level peons were fired back during the fake account/credit heist from a few years ago, not one single upper-level exec was removed (well, the former prez pulled his multi-million dollar golden parachute and "retired" early). 

Open check book (if you can figure out whose is whose), pay your fine, and go forth with promises not to commit any more crimes, er, "errors." Ain't America grand?

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