Wells Fargo & Co. plans to compensate as many as 570,000 borrowers who were unwittingly sold car insurance, the latest issue to taint the U.S. bank.
The San Francisco-based lender will pay as much as $80 million to customers who may have been “financially harmed” after purchasing collateral protection insurance tied to automobile loans, it said in a statement late Thursday.
|Inadequate controls
In a review of the program, which was scrapped in September, Wells Fargo found that “certain external vendor processes and internal controls were inadequate.” As a result, customers may have been charged premiums even if they were paying for their own vehicle insurance, and some may have had their vehicles repossessed, the bank said.
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