Published by yourcollegebars on July 29, 2017

Wells Fargo faces angry questions after new sales abuses uncovered

Wells Fargo faces angry questions after new sales abuses uncovered

NEW YORK (Reuters) – New revelations that Wells Fargo & Co (WFC.N) spent years enrolling unknown borrowers in costly auto insurance has put the bank under new pressure to respond to a month-long scandal over practices Sales that have damaged millions of Americans

The latest news that Wells Fargo’s 800,000 car borrowers were unduly charged by insurance again shocked investors again, sending its shares 2.6 percent on Friday.

Shareholders, analysts, lawmakers and consumer advocates demanded answers on how the situation manifested itself and why Wells Fargo did not reveal the problems before, given the agitation over false deposit and credit card accounts opened in the names of Customers without your permission.

“This is a real scandal – again,” said New York City Comptroller Scott Stringer, who oversees public pension funds that hold approximately 11.6 million Wells Fargo shares. “It’s incredible, extravagant, sad and yet the quintessence of Wells Fargo. This is not just a corporate debacle but has caused real human damage.”

Stringer asked the bank to set up a new independent president and “immediately” reveal more information.

Wells Fargo first became aware of potential problems a year ago, when the auto loan business began to receive an unusually high number of complaints, Franklin Codel, chief consumer lender, said in an interview.

The auto insurance program was suspended quickly, and the problem escalated to senior management, board and regulators, he said. Wells Fargo planned to delay public disclosure until it could notify affected customers and reimburse them.

“The problem with disclosure to the market today or several months ago is that customers start calling and asking when they will get their money,” he said. “It’s not a great experience for the customer to say, ‘Yes, we’ll get in touch with you.'”

Wells scandals show financial reforms have become dangerous: Democratic Senator
Wells scandals show financial reforms have become dangerous: Democratic Senator

The bank was asked to issue a press release late Thursday after the New York Times reported that 800,000 of its auto borrowers were charged for insurance they did not need from January 2012 to July 2016.

Wells plans to return $ 80 million to 570,000 eligible customers for a refund.

The latest revelations reflect what happened at Wells Fargo’s US branch offices for years. Under pressure to reach aggressive sales targets, thousands of employees signed customers for deposit and credit card accounts without their permission over a period of several years.

As part of a $ 190 million regulatory agreement in September, Wells said that 2.1 million fake accounts had been opened. A class action lawsuit against Wells Fargo puts the figure at 3.5 million.

Matthew Preusch, a lawyer with Keller Rohrback, who filed that lawsuit, said his firm is investigating whether auto borrowers have claims against the bank.

“It is likely to result in consumer litigation,” Preusch said.

Wells Fargo has previously said it found no evidence of improper sales practices outside its retail banking operation.

An April report from the board of directors after an internal investigation did not mention auto insurance issues, nor did the executives discuss them during a one-day reversal event in May, or during conference presentations and receiving calls to discuss quarterly results. ..

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