Another Wells Fargo mess: Pet insurance ripoff

Not even pet insurance is safe from Wells Fargo's scandals.Wells Fargo has begun refunding customers who were ...

Posted: Jul 20, 2018 12:11 PM
Updated: Jul 20, 2018 12:11 PM

Not even pet insurance is safe from Wells Fargo's scandals.

Wells Fargo has begun refunding customers who were harmed when the bank charged them for products including pet insurance, legal services, home warranties and other forms of insurance, a person familiar with the matter told CNNMoney on Thursday.

An ongoing review at Wells Fargo has found billing and telemarketing problems with so-called "add-on" products that are added to customer accounts, the source said.

Hundreds of thousands of Wells Fargo customers may have been charged for dozens of products they didn't fully understand, The Wall Street Journal reported on Thursday.

Wells Fargo said in a statement on Thursday that it's working with regulators to determine refunds.

Related: Wells Fargo finds even more customers that it overcharged

The bank is in the process of refunding tens of millions of dollars and the Consumer Financial Protection Bureau is investigating whether customers were deceived, the Journal reported.

The CFPB declined to comment.

In a statement, Wells Fargo said it's "reviewing" add-on products sold by the bank or its service providers.

"If issues are found during this review, we will make things right with customers in the form of refunds or remediation," Wells Fargo said. The bank added that it's "working with our regulators on the ongoing review."

Wells Fargo stopped selling the products in question in mid-2017, a person familiar with the matter said.

Wells Fargo previously disclosed in regulatory filings that it was reviewing practices related to certain consumer add-on products, including identity theft and debt protection products. The filings did not indicate the size of the refunds nor that the products included pet insurance and legal services.

Related: Wells Fargo's scandals are hurting its bottom line

The issue is not new for Wells Fargo.

In June 2015, Wells Fargo's regulators fined the bank $4 million for "unfair" and "deceptive" practices in how it billed and marketed identity protection and debt cancellation products.

The regulator, the Office of the Comptroller of the Currency, found that the violations were "part of a pattern of misconduct that resulted in financial gain" to Wells Fargo.

Other big banks have gotten into trouble over shady tactics with add-on products.

In 2015, the CFPB ordered Citibank to pay $700 million in relief to 8.8 million consumer accounts for "deceptive" marketing or retention practices. The CFPB also ordered Citi to pay $35 million in penalties and end its "unfair" billing practices.

JPMorgan Chase was ordered by the CFPB to pay $309 million in refunds for charging credit card customers for credit monitoring services they did not receive.

Related: Why Bank of America branches are disappearing

Of course, refunds are nothing new for Wells Fargo. Over the past two years, Wells Fargo has paid out rebates to customers for opening millions of fake accounts in their names, charging them mortgage fees they didn't deserve and forcing them into car insurance they didn't need.

Last week, Wells Fargo said it's setting aside another $285 million to refund foreign-exchange and wealth-management clients over incorrect pricing and fees.

Wells Fargo executives have expressed hope that the bank is nearing the end of an exhaustive search for more problems inside the bank.

"We're pretty far along, or perhaps done, going business to business looking for areas to correct," John Shrewsberry, Wells Fargo's chief financial officer, told reporters on Friday. "At this point, I would be very surprised if anything else emerged."

There is urgency to wrap things up. In February, Federal Reserve slammed Wells Fargo with unprecedented sanctions that prevent the bank from growing its balance sheet until its problems are fixed. Wells Fargo said it doesn't expect to get out of the penalty box until next year.

Meanwhile, Wells Fargo's business is hurting from all the legal problems at a time when its rivals are booming.

Last week, the bank revealed shrinking profits driven in part by higher expenses and losses from the countless scandals and hefty refunds. Wells Fargo also recently launched an expensive ad campaign aimed at repairing trust with customers. Advertising and promotion spending soared 51% last quarter.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 98447

Reported Deaths: 2072
CountyConfirmedDeaths
Hennepin27557932
Ramsey11167323
Dakota7692126
Anoka6281137
Stearns409424
Washington391855
Scott264833
Olmsted253528
Nobles197916
Blue Earth17366
St. Louis172542
Wright17017
Carver14467
Clay142441
Rice13478
Mower13446
Sherburne117714
Kandiyohi10563
Winona92018
Lyon7334
Waseca7228
Benton5633
Steele5552
Crow Wing55418
Nicollet54717
Freeborn5464
Watonwan5354
Chisago5171
Todd5072
McLeod5022
Le Sueur4764
Otter Tail4694
Beltrami4605
Martin44611
Goodhue3899
Pine3550
Douglas3522
Itasca35215
Polk3274
Isanti3191
Becker2842
Carlton2791
Morrison2702
Dodge2610
Pipestone23810
Chippewa2321
Cottonwood2290
Meeker2132
Wabasha2060
Sibley2023
Yellow Medicine1982
Brown1962
Cass1864
Rock1810
Redwood1783
Murray1742
Mille Lacs1693
Renville1618
Jackson1531
Unassigned15352
Faribault1470
Swift1441
Fillmore1330
Houston1300
Kanabec1288
Roseau1260
Koochiching1233
Hubbard1221
Pennington1201
Lincoln1180
Stevens1071
Pope1000
Aitkin841
Big Stone830
Wadena730
Wilkin713
Lac qui Parle681
Grant634
Lake600
Norman560
Marshall531
Mahnomen491
Red Lake451
Traverse340
Clearwater310
Lake of the Woods241
Kittson120
Cook70

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 87828

Reported Deaths: 1332
CountyConfirmedDeaths
Polk16113264
Woodbury559768
Johnson517927
Black Hawk454192
Linn4163114
Story348517
Dubuque340242
Scott309528
Dallas282938
Pottawattamie220139
Buena Vista200312
Marshall179434
Sioux17073
Wapello134157
Webster131714
Plymouth118221
Clinton113921
Muscatine112855
Crawford11086
Cerro Gordo106421
Warren9696
Jasper87034
Des Moines8068
Henry7734
Marion7728
Tama75332
Carroll6955
Lee6527
Wright5971
Dickinson5426
Boone5268
Bremer5067
Washington48511
Delaware4413
Louisa43415
Mahaska42720
Lyon3754
Jackson3583
Floyd3573
Franklin35218
Clay3434
Winneshiek3408
Benton3381
Hamilton3343
Winnebago32313
Hardin3111
Poweshiek3118
Buchanan2921
Jones2893
Kossuth2860
Butler2792
Emmet27510
Chickasaw2701
Shelby2701
Clarke2693
Clayton2683
Sac2670
Allamakee2656
Guthrie2649
Harrison2593
Cherokee2572
Cedar2531
Fayette2382
Madison2342
Grundy2294
Iowa2221
Palo Alto2080
Hancock1992
Mitchell1970
Humboldt1943
Howard1927
Mills1911
Page1910
Calhoun1883
Osceola1770
Cass1762
Pocahontas1662
Monona1621
Monroe16211
Lucas1566
Appanoose1443
Union1423
Jefferson1401
Taylor1341
Davis1284
Ida1281
Fremont1220
Keokuk1191
Van Buren1181
Worth1090
Greene1050
Montgomery995
Audubon891
Wayne882
Adair731
Decatur670
Ringgold532
Adams330
Unassigned140
Rochester
Overcast
49° wxIcon
Hi: 60° Lo: 42°
Feels Like: 43°
Mason City
Clear
53° wxIcon
Hi: 63° Lo: 43°
Feels Like: 53°
Albert Lea
Scattered Clouds
52° wxIcon
Hi: 61° Lo: 43°
Feels Like: 52°
Austin
Overcast
52° wxIcon
Hi: 61° Lo: 43°
Feels Like: 52°
Charles City
Broken Clouds
54° wxIcon
Hi: 63° Lo: 43°
Feels Like: 54°
Winds pick up for Wednesday
KIMT Radar
KIMT Eye in the sky

Community Events