The auto insurance scam involved selling unnecessary coverage and now includes sending letters containing mistakes.
The Wells Fargo scandal that rocked the financial services company in the second half of last year just became more unpleasant. As the bank attempts to recover from the latest damage to its reputation in which auto loan customers were sold insurance policies they didn’t need, they’ve now made another mistake they didn’t need.
The bank accidentally sent out letters about the auto insurance scam containing erroneous information.
The Wells Fargo scandal involved requiring car loan customers to take out an additional auto insurance policy even when they were already adequately covered. The added expenses associated with the unneeded insurance coverage caused dozens of thousands of people to experience the repossession of their vehicles.
Efforts are now being made to compensate those customers for their unnecessary losses as well as to repair their credit histories. Now, the latest step in those efforts have included mailing 38,000 letters to customers. According to Catherine Pulley, a spokesperson for the bank, those letters were sent to customers accidentally, containing erroneous information and not containing any refund money.
The latest error in the Wells Fargo scandal was the result of a coding mistake noticed later by the vendor who sent the letter.
“We will work with our vendor to ensure these customers receive the appropriate communication — including any refunds they’re eligible for,” said Pulley.
The Wall Street Journal was the first to report the bank’s mistake. It outlined a number of different challenges Wells Fargo is still facing as it works to correct the damage done to the thousands of customers affected by this lending and sales misconduct scandal.
Wells Fargo also sent a check to an individual by mistake, said Pulley. That individual was not among the bank’s customers. The financial services company has been having a very hard time recovering from all the mistakes that were involved in the development of this auto insurance scam.
In many ways, every time progress is made in the Wells Fargo scandal repairs, more mistakes and errors are discovered. This has been extremely hard on the bank’s reputation. The Federal Reserve recently upped the penalties for this scam as well as others the bank has experienced in recent months and years. This included replacing four board members and freezing growth until the bank can prove it has taken satisfactory actions to maintain better internal controls.