SACRAMENTO, Calif. – Commissioner Dave Jones today ordered the California Department of Insurance to open an investigation into recent allegations that Wells Fargo and National General Insurance improperly charged consumers for “force-placed” or “lender-placed” auto insurance for consumers who had auto loans with Wells Fargo.
In a July 27 news release, Wells Fargo admitted the company failed to properly manage the program and announced the company was taking steps to refund and compensate consumers affected by the improperly placed insurance and assisting with correcting those consumers’ credit reports, which were negatively impacted by the force or lender-placed insurance.
“These most recent revelations by Wells Fargo are particularly troubling,” said Commissioner Jones. “The department will investigate fully to determine the extent to which California consumers were affected by improper placement of force or lender-placed auto insurance and seek corrective action and penalties in the event that California’s consumer protection laws were violated.”
Force-placed or lender-placed insurance refers to insurance a lender requires a borrower to purchase by signing up the borrower for the insurance to cover the vehicle in case the borrower fails to get their own insurance or allows their auto insurance to lapse.
Pursuant to an earlier order from Commissioner Jones, the California Department of Insurance has an investigation underway regarding allegations that Wells Fargo signed consumers up for life insurance without their consent.