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California blames Wells Fargo for 1,500 false insurance policies



  Wells Fargo provokes the bipartisan wrath of Congress

Wells Fargo is being accused of grim business.

Authorities say that Wells Fargo customers in California were charged for insurance policies they did not want.

A one-year investigation by the California Department of Insurance blamed the sale of nearly 1

,500 of these unauthorized tenants and term life insurance policies on "inappropriate sales practices" at Wells Fargo.

These insurance policies were sold to Wells Fargo ( WFC ) customers at computer kiosks within bank branches between 2008 and 2016.

Although the policies of insurance were provided by Prudential ( PRU ) and other third parties, the notoriously unrealistic sales targets of Wells Fargo counted these insurance references for employee compensation purposes .

"Many customers complained that they simply did not know they had ever registered for such policies," the complaint said.

Other Wells Fargo customers said that bank employees entered their information into a policy request "under the pretext of simply issuing a quote, when in fact such requests were subsequently filed." That's despite the fact that the kiosks were supposed to be "self-service" because Wells Fargo workers were not licensed to sell insurance.

Authorities said that Wells Fargo "caused" a total of 1,469 insurance policies not authorized for California customers. It is not clear how many clients from other states were affected.

California regulators are now moving to suspend or even revoke Wells Fargo's insurance licenses, after the investigation found that the bank "lacked integrity", "had no good commercial reputation" and " It showed incompetence or lack of reliability. "

The investigation also determined that Wells Fargo employees sold insurance without a license.

"We feel the damage this caused to our customers," Wells Fargo said in a statement, adding that it has been cooperating with California authorities. Wells Fargo said it suspended the bank's online insurance operation in December 2016 and is "doing the right thing" for customers with refunds.

Related: Wells Fargo dismisses a powerful executive for misconduct

It is the latest example of the rotten sales culture of Wells Fargo that harms customers. The bank has discovered up to 3.5 million false bank accounts and credit cards created by workers trying to reach unattainable goals.

Last week, Wells Fargo announced plans to exit the personal insurance business. It's a significant change for Wells Fargo. Since 2003, the bank has provided personal insurance products for homeowners, renters and umbrellas. Plan to maintain your life insurance business.

The majority of unauthorized insurance sales took place between 2008 and 2012 and related to the tenant insurance issued by American Modern Insurance Group. Premiums typically ranged between $ 12 and $ 28 per month and were often automatically transferred from the customer's bank accounts.

Wells Fargo prompted the issuance of 1,258 insurance policies for unauthorized American Modern Insurance Group renters, according to regulators. American Modern Insurance Group did not respond to requests for comment.

Investigators found six other insurance policies for unauthorized tenants provided by Assurant ( AIZ ) which replaced American Modern Insurance Group in 2012.

A statement, Assurant said he had been "informed about this matter" but did not "comment on ongoing investigations."

Wells Fargo branch kiosks also allowed clients to sign up for a term life insurance provided. by Great-West Financial and Prudential, monthly premiums of $ 29 to $ 37.

California regulators discovered 187 Great-West unauthorized life insurance policies sold under Wells Fargo policies. agreement with Wells Fargo in 2014 after claims, according to regulators.

We do not suspect any fraudulent activity by Wells Fargo, "said a spokesperson for Great-West. relationship because we did not believe that the commercial model was effective. "

Related: More workers at Wells Fargo claim retaliation for complaints

There were 18 other life insurance policies not authorized at Wells Fargo when Prudential took over in 2014.

Prudential suspended its agreement with Wells Fargo in December 2016 and launched a review of the insurer's relationship with the bank. That decision came after Prudential employees alleged in a lawsuit that Wells Fargo customers sold insurance products they did not want. The Prudential lawsuit said that some insurance applications obviously listed fake email and address addresses in their applications as "Wells Fargo Drive" or "noemail@wellsfargo.com"

An investigation published earlier this year by the board of directors of Wells Fargo acknowledged that "The concerns of sales practice" have been "implicated" with the bank's online insurance program. The board's report says that Wells Fargo has hired outside attorneys to conduct an investigation into insurance issues.

Prudential declined to comment. The insurer has said it is willing to reimburse concerned customers.

A spokeswoman for the California Department of Insurance said any decision to suspend or revoke Wells Fargo's license would prevent the bank from selling life insurance in California.

CNNMoney (New York) First published on December 6, 2017: 2:40 PM ET


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