Wells Fargo was served with an accusation by the California Department of Insurance seeking to suspend or revoke its licenses to transact personal insurance for alleged improper insurance sales practices related to the company’s online insurance referral program.
The accusation is the result of a department investigation that found that from 2008 to 2016, Wells Fargo customers were issued approximately 1,500 insurance policies and charged premiums without their knowledge or permission.
“Companies that are licensed to transact insurance have an obligation to act with integrity, comply with all state and insurance laws and represent the best interests of consumers,” said Insurance Commissioner Dave Jones. “When any producer violates consumer trust in the name of profit, it reflects poorly on the entire profession.”
History of regulatory woes
Unfortunately for Wells Fargo’s insurance practice, this is not its first offense.
In July, the company planned to compensate more than 500,000 borrowers who were unwittingly sold car insurance. Despite its questionable practices, the company was surrounded by a major scandal on the banking side last year.
In 2016, Wells Fargo paid $185 million to government regulators to settle claims that the bank opened fraudulent deposit and credit card accounts. A bank review found that there were approximately 3.5 million unauthorized deposit and credit card accounts opened from 2009 to 2016. Bank employees opened these unauthorized accounts as part of an incentive compensation program that indirectly encouraged improper sales practices and was not adequately overseen by bank management.
Wells Fargo is expected to file a Notice of Defense.
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