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Wells Fargo may have forced 570,000 customers into unneeded auto insurance

Wells Fargo illegally seized service members' cars

Wells Fargo is trying to fix its battered reputation. The latest scandal won't help.

The bank said late Thursday it is "extremely sorry" for charging as many as 570,000 customers for car insurance they didn't need.

An internal review by Wells Fargo (WFC) found that about 20,000 of those customers may have defaulted on their car loans and had their vehicles repossessed in part because of these unnecessary insurance costs.

It's the latest black eye for Wells Fargo, which is still trying to recover from the scandal that launched the bank into turmoil nearly a year ago -- the creation of as many as 2 million unauthorized checking and credit card accounts.

The customers who were charged for car insurance had auto loans with Wells Fargo between 2012 and this year.

Wells Fargo auto loans require borrowers to have comprehensive and collision insurance for their cars. The contract also allows Wells Fargo to buy insurance on customers' behalf if they fail to buy it themselves.

Evidently, Wells Fargo bought insurance for some customers -- and charged them for it -- even when they had their own. And some people may have lost their cars because of it.

The number of customers hurt by the new scandal may be even larger than the bank admitted. An internal report prepared by a consulting firm and obtained by The New York Times found that more than 800,000...


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