Wells Fargo will pay $385 million to the thousands of auto loan customers it forced to purchase auto insurance when it wasn’t need or sold them insurance without telling them. National General — the auto underwriter that participated in the scam — will kick in an additional $7.5 million.
A judge still has to approve the settlement.
The company’s forced insurance action caused 250,000 customers to go into delinquency. Of the 250,000 going into delinquency, close to 25,000 autos were repossessed.
Wells Fargo says it has spent $2.7 billion so far to resolve this scandal and the scandal involving fraudulent accounts and manipulative sales practices it engaged in to pump up the bank’s financial standing and meet sales quotas.
The bank settled with attorneys general from all 50 states and the District of Columbia a couple of years ago for $575 million.
Source links: Insurance Journal, PropertyCasualty360.com, CBS News