A new lawsuit accuses Wells Fargo & Co of racketeering and fraud after it admitted charging several hundred thousand borrowers for auto insurance they did not ask for or need, causing many delinquencies. The class action filed on Sunday in San Francisco federal court against Wells Fargo. The new charges are separate and different from the one where its employees created as many as 2.1 million unauthorized customer accounts to meet sales goals.
Wells Fargo said late last week it would refund about $80 million to an estimated 570,000 customers who were wrongly charged for auto insurance from 2012 to 2017, including roughly 20,000 whose vehicles were repossessed. The San Francisco-based said this after The New York Times wrote about an internal report prepared for executives that detailed improper charges. The lead Plaintiff is Paul Hancock, a 34-year-old marketing consultant from Indianapolis.He alleges Wells Fargo charged him $598 for insurance though he repeatedly told the bank he had coverage from Allstate, and imposed a late fee after the unnecessary policy took effect.The lawsuit seeks unspecified damages, which could be tripled under federal racketeering law, for borrowers nationwide, and in California and Indiana.
Wells Fargo’s accounts scandal resulted in $185 million of regulatory penalties and a $142 million settlement of private litigation, and cost former Chief Executive John Stumpf his job.
The case is Hancock v Wells Fargo & Co et al, U.S. District Court, Northern District of California, No. 17-04324.