Aggressive online sales tactics appears to have caught up with Wells Fargo again—this time in California where the state insurance commissioner is seeking to suspend or revoke Wells Fargo & Co.’s insurance licenses for allegedly opening up 1,500 insurance policies without customers’ knowledge or permission.
The majority of the approximately 1,500 unauthorized policies were for renters insurance and were created online using unwitting bank customers’ accounts, California Insurance Commissioner Dave Jones said in a statement.
“Consumers should not be treated like chattel by corporations who take advantage of and abuse the consumers’ trust,” Jones said in a press release. “Companies licensed to transact insurance have an obligation to act with integrity.”
In some cases, Wells Fargo bank customers were told they were merely getting an insurance quote, but Wells Fargo employees went ahead and submitted the applications to buy insurance anyway without the customers permission. The customers’ bank accounts were then auto-debited to pay for the policy premiums.
“We have been cooperating with the California Department of Insurance over the course of this year,” a Wells Fargo spokesman said in statement. “We are sorry for any harm this caused our customers and we are making things right with them as part of an ongoing remediation.”
As a result of a separate investigation by California and New York insurance regulators earlier this year, Wells Fargo was forced in October to refund approximately $80 million to customers who were wrongly charged for auto insurance from 2012 to 2017.
The bank announced earlier this year that it was exiting the personal property-casualty business and had suspended its online referral programs for renters and term life insurance. Wells Fargo completed the sale of its Wells Fargo Insurance Services USA to USI Insurance Services of Valhalla, N.Y. earlier this week.
This is just the latest chapter in what has been an ongoing saga of sales scandals that have plagued the bank, which has 40 million retail customers whose accounts have allegedly been ripe for the picking by aggressive bank sales staff.
In 2016, Wells Fargo was fined $185 million when regulators discovered that employees opened some 1.5 million unauthorized bank accounts and applied for 565,000 unauthorized credit cards in unsuspecting customers’ names.
The bank was also forced to reimburse $2.6 million in fees that customers were charged in the scam. The bank fired 5,300 employees as a result of the scandal, which analysts said was created by compensation programs that encouraged employees to push the limits with aggressive cross selling.