Wells Fargo — Runaway Indeed


A financial institution entirely out of control

A financial institution entirely out of control

Wells Fargo Bank continues to violate the First Law of Holes.

It’s already known that the bank fraudulently created over 2 million fake bank accounts and credit cards designed to slowly suck money out of its customer’s accounts. That got Wells Fargo fined $185 million and reimbursement orders.

The State of California announced it will no longer use Wells Fargo for the issuance of state municipal bonds, and will no longer invest in any Wells Fargo securities. The stock market noticed and tagged its shares, which are down some 10%.

The Department of Justice found that Wells Fargo’s repo division had illegally taking possession of over 400 service members’ vehicles. The bank paid $4.1 million to settle Justice Department charges that it violated federal law that protects active armed forces service members by seizing 413 cars owned by service members without a court order.

Now it turns out the same bank has been charging its auto loan customers for auto insurance they didn’t want, didn’t need and couldn’t afford. It turns out more than 800,000 people who took car loans from Wells Fargo were charged for auto insurance they did not need. Some of them are still paying for it, according to an internal report prepared for the bank’s executives.

Wells Fargo commissioned a report from consultant Oliver Wyman. The report examined insurance policies sold to Wells customers from January 2012 through July 2016. The New York Times got its hands on a copy of that report. The report found that the insurance, which the bank required, was more expensive than auto insurance that customers often already had obtained on their own. The report tried to determine how many Wells Fargo customers were hurt and how much they should be compensated. It estimated that the bank owed $73 million to wronged customers. There were an estimated 25,000 wrongful repossessions.

Wells Fargo says it is sorry. Again.

Actions speak a lot louder than words. It’s pretty clear Wells Fargo is only sorry when it gets caught. And that is regrets don’t extend to undoing all of the damage it causes. After the Great Recession, you’d think it would be impossible for huge, multi-national banks to blacken their image. You’d be wrong.

Advertisements