Wells Fargo has been accused of even more shady business.
Authorities tell you Wells Fargo customers in California were charged for plans that they didn’t like.
A year-long investigation by the California Section of Insurance blamed the sales of almost 1,500 of these unauthorized renters and term life policies on “improper sales practices” at Wells Fargo.
These plans were sold to Wells Fargo (WFC) clients at computer kiosks inside bank branches between 2008 and 2016.
Even though the plans were provided by Prudential (PRU) and other third-parties, Wells Fargo’s notoriously unrealistic sales goals counted these insurance referrals towards employee reimbursement goals.
“Many clients complained they easily had no knowledge of ever signing up for such plans,” the complaint said.
Other Wells Fargo clients said bank employees entered their info onto a policy application “in the guise of merely issuing a estimate, when in fact such applications were down the road submitted.” That’s even though the kiosks were said to be “self provider” because Wells Fargo personnel weren’t licensed to market insurance.
Authorities said Wells Fargo “caused” a total of 1 1,469 unauthorized plans to get issued to California clients. It’s not clear just how many customers from other states were impacted.
California regulators are actually moving to suspend or even revoke Wells Fargo’s insurance licenses, after the investigation found the bank “without integrity,” “not of great business status” and having “shown incompetency or perhaps untrustworthiness.”
The probe also determined that Wells Fargo employees were selling insurance without a license.
“We happen to be sorry for any damage this caused our clients,” Wells Fargo stated in a assertion, adding that it is been cooperating with California authorities. Wells Fargo stated it suspended the bank’s online insurance procedure in December 2016 and is “making things right” for clients with refunds.
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It’s the latest exemplory case of Wells Fargo’s rotten sales culture hurting clients. The lender has uncovered as many as 3.5 million fake bank and credit card accounts produced by workers trying to meet unreachable goals.
The other day, Wells Fargo announced plans to exit the personal insurance business. It’s a significant shift for Wells Fargo. Since 2003 the bank has provided auto, property owners, renters and umbrella personal insurance items. It plans to keep its life insurance business.
The majority of the unauthorized insurance sales took place between 2008 and 2012 and concerned renters insurance issued by American Modern Insurance Group. Premiums commonly ranged between $12 and $28 per month and were often immediately transferred from customer’s bank accounts.
Wells Fargo caused 1,258 unauthorized American Modern Insurance Group renters plans to get issued, regulators allege. American Modern Insurance Group didn’t react to requests for comment.
Investigators found another 6 unauthorized renters plans provided by Assurant (AIZ), which replaced American Modern Insurance Group in 2012.
In a statement, Assurant stated it has been “made alert to this matter” but it does not “touch upon ongoing investigations.
Wells Fargo’s branch kiosks as well allowed customers to sign up for term life provided by Great-West Financial and Prudential. These policies experienced every month premiums of $29 to $37.
California regulators uncovered 187 unauthorized Great-West term life plans sold to Wells Fargo plans. Great-West terminated its arrangement with Wells Fargo in 2014 following complaints, according to regulators.
“We didn’t suspect any fraudulent activity for Wells Fargo,” a Great-West spokesman stated. “We ended the partnership because we didn’t believe the business enterprise model was effective.”
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There were another 18 unauthorized term life policies at Wells Fargo when Prudential took more than in 2014.
Prudential suspended its arrangement with Wells Fargo on December 2016 and launched an assessment of the insurer’s relationship with the bank. That decision came after Prudential employees alleged in a lawsuit that Wells Fargo clients were sold insurance items they didn’t wish. The Prudential lawsuit stated that some insurance applications stated obviously fake home and email addresses on the applications like “Wells Fargo Drive” or “firstname.lastname@example.org”
An investigation released earlier this season by Wells Fargo’s board of directors acknowledged that “sales practice considerations” have been “implicated” with the bank’s online insurance software. The board report said Wells Fargo possesses hired outside lawyers to carry out a probe into the insurance problems.
Prudential declined to comment. The insurer has stated it’s ready to reimburse concerned customers.
A good spokeswoman for the California Section of Insurance said that any decision to suspend or revoke Wells Fargo’s permit would block the bank from advertising life insurance in California.