Regulators: Wells Fargo ‘sold’ insurance to customers without their knowledge
The California Department of Insurance on Tuesday accused San Francisco-based Wells Fargo of improper insurance sales practices that led to insurance products being purchased for customers without their knowledge.
The accusation is the result of a department investigation that found that between 2008 and 2016, Wells Fargo customers were issued about 1,500 insurance policies and charged premiums without their knowledge or permission.
The state Department of Insurance is now seeking to suspend or revoke Wells Fargo’s licenses to transact personal insurance in California.
In a statement, Insurance Commissioner Dave Jones said that companies with such licenses have an obligation to act with integrity:
“When any producer violates consumer trust in the name of profit, it reflects poorly on the entire profession.”
Department officials said that Wells Fargo is expected to file a Notice of Defense in response to the accusation.
This is not the first time Well Fargo has found itself in hot water. Just last year, the company paid $185 million to government regulators to settle claims that it opened more than 3 million fraudulent deposit and credit card accounts since 2009.
Wells Fargo said in a statement:
“We have been cooperating with the CA Department of Insurance (DOI) over the course of this year. We are sorry for any harm this caused our customers and we are making things right for them as part of an ongoing remediation. Wells Fargo announced we are exiting the property and casualty Personal Insurance business last month and this change is unrelated to the DOI investigation.”
According to the Department of Insurance, Wells Fargo employees opened the unauthorized accounts as part of an incentive compensation program that indirectly encouraged improper sales practices and was not adequately overseen by bank management.