Wells Fargo set to reimburse $80 million to clients affected by car loan insurance

Wells Fargo and Co has stated its commitment to refunding about $80 million to 570,000 customers who may have been billed wrongly following the auto CPI(collateral protection insurance) policies’ problems.

Since September, Wells Fargo has been involved in a scandal. The complaint that Wells Fargo’s retail banking staff had created about 2.1 million client accounts without due authority made the firm reach a $190 million settlement with the regulatory bodies.

Wells Fargo retraces its steps

The bank had sacked 5,300 workers for wrong sales strategies over past five years but didn’t amend its procedures and policies or query managers until the masses came with their claims and complaints.

On Thursday, Wells Fargo said its set to reimburse $80 million to clients who were improperly billed for car loan insurance in the months ahead. The proposed refund included a $16 million of account correction and a $64 million to be paid in cash.

Speaking of the plan, the head of Wells Fargo Consumer Lending, Franklin Codel said that the firm admits its failure to handle the CPI program efficiently. He also apologized to its clients for any inconveniences their attitude may have caused them.

Wells Fargo said it had kicked off a review of the program in July 2016 and stopped it in September because of the discoveries. According to New York Times, over 800,000 persons who got car loans from Wells Fargo were meant to pay for auto insurance that wasn’t used and some of these unsuspecting customers paid for it.

According to the company, about 490,000 clients possess double vehicle insurance coverage while 60,000 customers were not properly given disclosures before the CPI coverage.

For about 20,000, the excess costs of CPI caused the confiscation of their vehicles. Wells Fargo said that such customers are entitled to extra payments that serve as compensation for the loss of their cars.