James Bilsborrow, a Weitz & Luxenberg partner and practice group co-chair, is speaking at a virtual event titled “PFAS Litigation and Regulatory Developments Conference.” It…Read More
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Wells Fargo and National General Insurance Scam
According to the Wells Fargo insurance fraud lawsuit, Wells Fargo and National General Insurance joined together in an effort to swindle customers out of millions of dollars for car insurance they did not need. The scheme began in at least 2012 and continued for several years.
Then, on July 27, 2017, The New York Times exposed the Wells Fargo auto insurance scandal to the public. According to the article, an investigation revealed that more than 800,000 Wells Fargo customers may have been blindsided by the deception.(1)
Weitz & Luxenberg Initiates Wells Fargo Insurance Fraud Litigation
Weitz & Luxenberg wasted no time initiating a Wells Fargo insurance fraud lawsuit. On August 29, 2017, the firm filed a class action complaint against both Wells Fargo and National General Insurance.
We have filed this Wells Fargo insurance fraud lawsuit on behalf of our clients. They are among the more than hundreds of thousands of auto loan customers cheated out of millions of dollars for auto insurance they did not need or want.
Close to 250,000 of these customers may have fallen behind in paying premiums they never agreed to pay. Of these, almost 25,000 customers may have had their cars unlawfully repossessed.
Wells Fargo Auto Insurance Scandal
When Wells Fargo customers arranged their auto loans, the bank passed along their private information to National General Insurance, and schemed to impose unneeded collateral protection insurance.
Instead of verifying that customers had car insurance, National General Insurance issued the customers car insurance policies and automatically deducted premiums from customer bank accounts.
These premiums were generally excessive, costing customers more money than they would be asked to pay for other auto insurance policies, which they already had. Thus, both companies bilked thousands of customers.
“Their deceit was reprehensible,” explains attorney Curt Marshall, a key member of the Weitz & Luxenberg’s Environmental and Consumer Protection litigation team. “Now, hundreds of thousands of people are facing enormous financial challenges.
“Their credit ratings have dropped, many are in debt, and many have lost their cars through repossession. Wells Fargo and National General Insurance need to rectify this situation immediately.”
Key Role in Wells Fargo Insurance Fraud Litigation
Mr. Marshall and Paul Novak, the managing attorney of Weitz & Luxenberg’s Detroit office, are playing a key role in what has now become a multidistrict litigation against Wells Fargo and National General Insurance. Both are serving on the Plaintiffs’ Steering Committee, an important leadership committee.
A federal judge appointed Messrs. Novak and Marshall to this leadership committee just months after Weitz & Luxenberg initiated the class action complaint against Wells Fargo and National General Insurance.
Our Wells Fargo lawsuit claims Wells Fargo knowingly deceived customers by issuing unnecessary auto Collateral Protection Insurance (CPI) policies customers did not need or agree to purchase. Wells Fargo had access to customer bank accounts and automatically deducted CPI insurance premiums without authorization.
Wells Fargo Auto Insurance Scheme Scams Customers
Beginning at least in 2012, Wells Fargo joined with National General Insurance to perpetrate an auto insurance scam that would end up harming more than 800,000 Wells Fargo customers. The deceit began when customers arranged car loans with Wells Fargo.(2)
Wells Fargo customers gave the bank private information necessary to finance the purchase of a car. What customers did not know was that Wells Fargo was passing that private banking information along to National General Insurance.(3)
According to The New York Times, National General Insurance “was supposed to check a database to see if the owner had insurance coverage. If not, the insurer would automatically impose coverage on the customers’ accounts, adding an extra layer of premiums and interest to their loans.(4)
“When customers who checked their bills saw the charges and notified Wells Fargo that they already had car insurance, the bank was supposed to cancel the insurance and credit the borrower with the amount that had been charged.”(5)
Many customers noticed the inappropriate charges, but when they repeatedly contacted Wells Fargo, the bank ignored their concerns. Others customers may not have noticed the money for these extra auto loan premiums being deducted from their bank accounts because they were being paid automatically.(6)
Wells Fargo and National General Insurance’s Scam Leaves Customers Financially Devastated
Wells Fargo arranged a sequence of deducting money from a customer’s bank account that worked in the bank’s favor:(7)
- The bank deducted the interest owed on the car loan.
- The bank deducted interest on the expensive auto insurance the customer never agreed to purchase.
- The bank deducted principal on the car loan.
- The bank deducted the excessive car insurance premium for car insurance the customer never agreed to purchase.
According to The New York Times, “The expense of the unneeded insurance, which covered collision damage, pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions.”(8)
Wells Fargo Customers Continue to Suffer Financial Difficulties
In addition to unknowingly having excessive car insurance premiums deducted from their bank accounts, Wells Fargo customers face multiple financial consequences, such as:(9)
- Repossession costs
- Late fees
- Fees charged for insufficient funds
- Damage to credit reports
As The New York Times points out, “Wells Fargo automatically imposed the insurance through its Dealer Services unit.” This lender-placed auto insurance may in fact be “considerably more expensive than insurance” customers could purchase on their own.(10)
Solid History of Winning Lawsuits Against Large Companies
Since its founding more than 30 years ago, Weitz & Luxenberg has made it our mission to represent clients who have been harmed by the reckless, irresponsible conduct of others. We are particularly concerned when large companies act in their own self-interest, thinking only of their profits and nothing of the people they are harming.
As a national firm, we have the resources to stand up to large, seemingly untouchable companies such as Wells Fargo and National General Insurance. We also have a solid history of winning, securing billions of dollars on behalf of our clients, sometimes in settlements and sometimes in jury verdicts.
Although a past record does not guarantee future success, Weitz & Luxenberg has the experience and resources necessary to stand up to large, national corporations.