Wells Fargo Fraudulently Force-Placed CPI Auto Insurance Class Action

When plaintiff Paul Hancock bought a vehicle in Februrary 2016, the complaint for this class action says, he financed it with a loan from Wells Fargo and purchased an auto insurance policy through Allstate. However, in May 2016, the complaint says, Wells Fargo force-placed a CPI insurance policy on his vehicle and charged him $598 for it. CPI insurance is collateral protection insurance, meant to cover the vehicle that is collateral for the loan used to purchase it.

The complaint alleges that Hancock repeatedly contacted Wells Fargo to tell them that he already had the necessary coverage, but that the bank refused to return the money they had collected and continued to try to force him to pay for the insurance, including being charged a late fee as soon as the CPI policy was established.

This class action proposes a class and two subclasses.

  • Nationwide Class: All US residents who got an auto loan through Wells Fargo or its subsidiaries or divisions, and who were charged for CPI auto insurance.
  • California State Class: All California residents from the above class.
  • Indiana State Class: All Indiana residents from the above class.

According to the complaint, Hancock was only one of 800,000 auto loan customers ensnared in the Wells Fargo and National General Insurance Company scheme, one that pushed 250,000 of them into delinquency and caused the unlawful repossession of nearly 25,000 vehicles. The financial harm it did to customers, the complaint says, included higher premiums, delinquency charges, late fees, repossession, higher interest rates, overdrawn accounts, account delinquencies, and damage to credit ratings.

The complaint alleges that neither Wells Fargo nor National General checked to see if customers were already covered by appropriate insurance, but simply imposed the coverage, going so far as to automatically deduct the cost of the insurance from customers’ bank accounts, along with the regular payments due on the auto loans.

Furthermore, the CPI insurance policies were more expensive than the borrowers’ own coverage, the complaint says; it alleges that Wells Fargo received a kickback from National General for the unnecessary policies. Customers were forced to pay for the unnecessary policies to avoid late fees, interest charges, and repossession.

The allegations against Wells Fargo includes violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and fraud charges, among other things, and the complaint claims that the statute of limitations has been tolled by the bank’s active concealment and misleading actions. 

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Wells Fargo Fraudulently Force-Placed CPI Auto Insurance Complaint

July 30, 2017

When plaintiff Paul Hancock bought a vehicle in Februrary 2016, the complaint for this class action says, he financed it with a loan from Wells Fargo and purchased an auto insurance policy through Allstate. However, in May 2016, the complaint says, Wells Fargo force-placed an insurance policy on his vehicle and charged him $598 for it. The complaint alleges that Hancock repeatedly contacted Wells Fargo to tell them that he already had the necessary insurance coverage, but that the bank refused to return the money they had collected and continued to try to force him to pay for the insurance, including being charged a late fee as soon as the CPI policy was established. According to the complaint, Hancock was only one of 800,000 auto loan customers ensnared in the Wells Fargo and National General Insurance Company scheme, one that pushed 250,000 of them into delinquency and caused the unlawful repossession of nearly 25,000 vehicles.

 

wells_fargo_forced_placed_auto_insuance.pdf

Case Event History

Wells Fargo Fraudulently Force-Placed CPI Auto Insurance Complaint

July 30, 2017

When plaintiff Paul Hancock bought a vehicle in Februrary 2016, the complaint for this class action says, he financed it with a loan from Wells Fargo and purchased an auto insurance policy through Allstate. However, in May 2016, the complaint says, Wells Fargo force-placed an insurance policy on his vehicle and charged him $598 for it. The complaint alleges that Hancock repeatedly contacted Wells Fargo to tell them that he already had the necessary insurance coverage, but that the bank refused to return the money they had collected and continued to try to force him to pay for the insurance, including being charged a late fee as soon as the CPI policy was established. According to the complaint, Hancock was only one of 800,000 auto loan customers ensnared in the Wells Fargo and National General Insurance Company scheme, one that pushed 250,000 of them into delinquency and caused the unlawful repossession of nearly 25,000 vehicles.

 

wells_fargo_forced_placed_auto_insuance.pdf
Tags: Auto Insurance, Deceptive Insurance Practices, Forced Placed Insurance