Certain members of Wells Fargo executive leadership team were likely aware that the company’s auto insurance branch was possibly overcharging customers for years, yet delayed on taking any action to rectify the situation. According to a report from Reuters, the problem was known about for almost four years before the bank decided to end the program.
These allegations have come to light after the details of a large class-action lawsuit were unsealed earlier this week. The documents allegedly showed that high-level Wells Fargo officers, “including then-General Counsel James Strother and chief auditor David Julian,” knew there was an issue with the billing system, according to Reuters.
“We have been reviewing customer accounts and developing a remediation plan — which we hope to finalize very soon,” said Wells Fargo spokeswoman Natalie Brown while speaking to Reuters. Brown also stated that the company would be reimbursing customers who were affected.
According to Reuters, Wells Fargo initially calculated the amount over-billed to be around $60 million; however, the company has exponentially increased that sum to more than $241 million.
Unfortunately for the company and its investors, this is not the first scandal to hit the bank. In 2016 it was discovered that several Wells Fargo employees had opened phony accounts and fraudulently applied for credit cards. According to a report from Fortune, the employees involved in the scandal did so in order to earn company sponsored incentives by reaching target sales numbers. More than 5,000 Wells Fargo employees were terminated in the wake of that scandal, according to CNN.
“We needed to send a really strong message to our stakeholders, investors, team members, to our regulators, to the elected officials, around the fact that we did have a flawed incentive plan around sales goals and that was done,” said Wells Fargo’s Executive Vice President of Community Banking and Consumer Lending Mary Mack while speaking to Fortune.
Worse still, another report from Reuters published earlier this week stated that Wells Fargo’s home loan service made critical errors which resulted in “more home foreclosures than anticipated.” The internal error blocked almost 900 homeowners with Wells Fargo mortgages from modifying their loans. The result was 545 unnecessary foreclosures.
“We’re very sorry that the errors occurred and have assigned a single, dedicated point of contact to ensure that each customer is engaged with and assisted individually,” wrote Wells Fargo spokesman Tom Goyda in an email to Reuters.
According to Market Watch, at the time of this writing Wells Fargo is currently trading for $53.44 per share.
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