The journey back to a positive reputation in the consumer market has hit another snag for Wells Fargo. After the fake account scandal damaged the company’s credibility, Wells Fargo could not seem to avoid subsequent fallout. Now, there’s more bad news for the bank. California authorities have accused Wells Fargo of charging customers for insurance policies they didn’t ask for and didn’t want. The allegations have come after a year-long investigation that turned up about 1,500 life and renter’s insurance policies that were, according to investigators, “unauthorized.”According to various media reports, the “unauthorized” policies were “sold” to customers at computer kiosks inside bank branches in the eight-year period from 2008 to 2016. Wells Fargo didn’t directly offer the policies, they were third-party sales of products being offered by insurers like Prudential. A report by CNN said, “Many customers complained they simply had no knowledge of ever signing up for such policies…”
This quote came from one of the legal complaints made against Wells Fargo. In the same report, CNN said investigators said customers complained of having their personal information entered into policy applications either without their expressed permission or after being told the information was only going to be used for a “quote.”
Even without permission, these applications were submitted for approval. As another wrinkle in this case, Wells Fargo employees were not licensed to sell insurance, so they were not supposed to be leading the consumers at the kiosks anyway. Even with this restriction, investigators have said Wells Fargo employees “caused” the “unauthorized” insurance policies to be issued regardless of customer desires or licensing prohibitions. Following these investigations, banking and insurance regulators in California are taking steps to potentially revoke Wells Fargo’s insurance licenses. In response, Wells Fargo issued the following statement:
“We are sorry for any harm this caused our customers… ”
The company followed this up by saying it would be “making things right” by refunding customers. Now, Wells Fargo announced plans to get out of the personal insurance market. That’s a big decision for the bank, which has been offering multiple lines of property and casualty insurance for more than a decade. The bank has said it plans to continue to offer life insurance products.
Once again, Wells Fargo is back in a position of digging out of a hole in order to earn back customer trust. And, once again, the company is moving slowly to rebuild that trust.
Ronn Torossian is the Founder and CEO of the New York based public relations firm 5WPR: one of the 20 largest PR Firms in the United States.