Wells Fargo Signed Up Customers For Auto Insurance They Didn't Need Wells Fargo is facing another scandal. This time, the bank acknowledges it signed up nearly 500,000 auto-loan customers for insurance they didn't need. Thousands lost their cars to repossession.
NPR logo

Who Snatched My Car? Wells Fargo Did

  • Download
  • <iframe src="https://www.npr.org/player/embed/541182948/541197575" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Who Snatched My Car? Wells Fargo Did

ARI SHAPIRO, HOST:

Another scandal at Wells Fargo has been uncovered. This time, the bank signed up nearly half a million customers with auto loans for insurance that they didn't need. They didn't need it because they already had car insurance. Customers say they had no idea this was happening and that the bank expected them to pay for this extra policy. Wells Fargo acknowledges that tens of thousands of people wound up in default, which affected credit scores. And thousands had their cars repossessed. NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: Back in February, Michael Feifer was heading off to his job in Maryland at a company that builds guitars, and he walked to the spot where he'd parked his car the night before. But it wasn't there.

MICHAEL FEIFER: I called the police. I was livid. I thought somebody stole my car.

ARNOLD: Somebody had improperly made off with Feifer's car, but it wasn't car thieves. It was Wells Fargo Bank, which the police told Feifer.

FEIFER: And that's when I found out it was repossessed.

ARNOLD: Which he says didn't seem to make any sense.

FEIFER: I was confused because my payments were automatically taken out. I've never missed a payment. My insurance is current.

ARNOLD: So he called Wells Fargo, which we should note is a sponsor of NPR, and he says he was told that the bank had put another insurance policy on his car. And that got him marked as delinquent for not paying that insurance, which he didn't want or need or even know about.

FEIFER: They said, well, you owe $1,500.

ARNOLD: So Feifer got all his documents together, and he made an appointment at his local Wells Fargo bank branch.

FEIFER: I showed up at that bank with my bank statement showing all the payments I made for my vehicle and my proof of insurance showing that I've never had a lapse in my insurance.

ARNOLD: And so they were just scratching their heads basically, like, why did we repossess this car?

FEIFER: Exactly. The people at the bank were like, well, you shouldn't owe anything because it's not your fault. They were just as confused as I was.

ARNOLD: Feifer says the employees at the branch were trying to be helpful. They called up the Wells Fargo department for him that deals with car repossessions to try to find out what was going on. They put on the speaker phone. But that didn't work out so well because all of them kept getting put on hold.

FEIFER: We were probably on hold for a total of two and a half hours while I was in there.

ARNOLD: Wow.

FEIFER: I literally spent the whole day at the Wells Fargo branch that I was at. The employees at the Wells Fargo there were getting frustrated, too. They were like, this is ridiculous. You shouldn't be on hold for this long.

ARNOLD: What Feifer didn't know was that Wells Fargo had already been doing an internal investigation into complaints from lots and lots of customers for this same problem. But that didn't seem to help Feifer that day. He was eventually told to call back later in the week. When he did, the woman on the phone said there was no record of his prior calls from the branch.

FEIFER: And she was rude to me. She was talking over me. I felt like she wasn't willing to hear what I had to say. The only thing she wanted to hear was, I'm going to pay this money right now.

ARNOLD: Meanwhile, Feifer was told that his car was going to be auctioned off two weeks from the day it was repossessed. So in the end, after much haggling with the bank, he paid about $600 to get his car back. Feifer figured this was just some freak thing, but when he heard that this insurance debacle affected half a million customers...

FEIFER: I was blown away. I wasn't alone in it. And I felt like they're preying on everybody, taking people's money. I felt like they're crooks.

ARNOLD: Wells Fargo says that this was not a case of trying to improperly profit at customer's expense but rather just an embarrassing breakdown in processes and internal controls. In a statement, the bank acknowledges that 490,000 customers were signed up for insurance that they did not need. The bank is setting aside $80 million to reimburse customers. Class action lawsuits are being filed. The bank has no comment on those. But a spokesperson says Wells Fargo is very sorry for Michael Feifer's experience and that he will be included in the remediation effort. Chris Arnold, NPR News.

Copyright © 2017 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.