Commissioner Jones orders investigation of allegations Wells Fargo and National General Insurance unlawfully signed up consumers for auto insurance
News: 2017 Press Release
SACRAMENTO, Calif. - Commissioner Dave Jones today ordered the California Department of Insurance to open an investigation into recent allegations that Wells Fargo and National General Insurance improperly charged consumers for "force-placed" or "lender-placed" auto insurance for consumers who had auto loans with Wells Fargo.
In a July 27 news release, Wells Fargo admitted the company failed to properly manage the program and announced the company was taking steps to refund and compensate consumers affected by the improperly placed insurance and assisting with correcting those consumers' credit reports, which were negatively impacted by the force or lender-placed insurance.
"These most recent revelations by Wells Fargo are particularly troubling," said Commissioner Jones. "The department will investigate fully to determine the extent to which California consumers were affected by improper placement of force or lender-placed auto insurance and seek corrective action and penalties in the event that California's consumer protection laws were violated."
Force-placed or lender-placed insurance refers to insurance a lender requires a borrower to purchase by signing up the borrower for the insurance to cover the vehicle in case the borrower fails to get their own insurance or allows their auto insurance to lapse.
Pursuant to an earlier order from Commissioner Jones, the California Department of Insurance has an investigation underway regarding allegations that Wells Fargo signed consumers up for life insurance without their consent.
Commissioner Jones also directed the department to work with other state insurance regulators who might be opening investigations of Wells Fargo and National General Insurance.
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Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
