sbonomo
Footballguy
These guys cannot get out of their own way. They deserve whatever is coming to them! Wells Fargo - Ouch
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Wells Fargo at it again (1 Viewer)
- Thread starter sbonomo
- Start date
GroveDiesel
Footballguy
Some seriously shady stuff. My bet is that other Banks are doing similar stuff and just haven't been caught yet.
Courtjester
The Town Drunk
I have been with Wells Fargo since 2000 as far as savings/checking/credit cards and they have been good to us, but their auto loans are absolute garbage and a scam.
I have had two car loans with them over that time period and both times, they have done the same thing. You make your payment for a few months and then they send you the letter saying "A review of your account shows you do not have insurance coverage and unless your provide proof of same within 10 days, we will be forced to provide you our insurance and increase your loan payment" A copy of your card wasn't enough, you had to have your insurance company fax them a copy of your policy and some declaration page or whatever. BTW I have been with State Farm for 25 years and the costs of Wells insurance was through the room.
A few more months go by and sure enough, here comes the letter again. So rinse and repeat with the agent and problem solved. One time I got the letter two months in a row. So I was done--refi'd and I was out of there.
On my new Lancer I got placed with Wells again and I hoped this wouldn't be a problem, but nope. Six months in, here comes the letter. I provide proof and make my payment. I immediately start the refi with my credit union and before I could complete it that next month, I got another letter.
Just think about it, even if 10% of their loans don't follow thru with providing the proof, they can force their insurance on people and the first people will know about it is when they go to make their payment.
I have had two car loans with them over that time period and both times, they have done the same thing. You make your payment for a few months and then they send you the letter saying "A review of your account shows you do not have insurance coverage and unless your provide proof of same within 10 days, we will be forced to provide you our insurance and increase your loan payment" A copy of your card wasn't enough, you had to have your insurance company fax them a copy of your policy and some declaration page or whatever. BTW I have been with State Farm for 25 years and the costs of Wells insurance was through the room.
A few more months go by and sure enough, here comes the letter again. So rinse and repeat with the agent and problem solved. One time I got the letter two months in a row. So I was done--refi'd and I was out of there.
On my new Lancer I got placed with Wells again and I hoped this wouldn't be a problem, but nope. Six months in, here comes the letter. I provide proof and make my payment. I immediately start the refi with my credit union and before I could complete it that next month, I got another letter.
Just think about it, even if 10% of their loans don't follow thru with providing the proof, they can force their insurance on people and the first people will know about it is when they go to make their payment.
The Big Donkey
Footballguy
Mrs. Rannous
Footballguy
I had to settle my dad's estate, and he banked with WF. I watch all the lawsuit news. I'm waiting for one to include him in the group.
Johnny Rock
Footballguy
Force them to dissolve. On top of their other scams this SHOULD be the end of them. 
Juxtatarot
Footballguy
I won't defend Wells Fargo and from the sound of things, at a minimum, they had a lot of problems with their program.
However, I think collateral protection insurance is an issue where customers are quick to blame lenders for something that often isn't their fault. It's also a process that a lot of people don't seem to understand.
Let's start with the basics. The lender wants to make sure you keep insurance since they have interest in the collateral. They don't want to have to take back a wrecked car that is almost worthless. Accordingly, it's a part of loan contracts that you will maintain proper insurance and if you don't you give the lender the right to purchase insurance at your expense that covers the lender's collateral. All this is reasonable. But if you disagree, you shouldn't agree to the loan in the first place.
Usually there won't be a problem. There is an electronic exchange between lenders (or their third party trackers) and most of the big insurance companies. Also, a paper copy of your insurance is sent to the lienholder. Basically they are looking to match up your loan with an insurance policy under your name, the proper year, make, model and VIN of your vehicle, and make sure that the lienholder is listed as the loss payee. If there is a match, all should be fine. If there isn't, warning notices will go out. If things aren't resolved in time, an insurance policy is force-placed are your payments go up.
So what could go wrong when you have insurance but you still get a notice? I see two things most commonly. 1. Lienholder wasn't added to the policy. Typically the insurance company should ask the borrower when the insurance is being set up but for some reason this seems to be missed way more often than it should be. 2. There is a typo or mistake somewhere such as with the VIN.
If you ever get one of these letters, my advice is to pull out your actual policy and check it. If you see the error or don't see the lienholder listed on the policy, call your agent and get it fixed. That will solve the problem most of the time.
I could write a lot more about this but I'm going to stop here because, frankly, I don't know why I'm writing about this on a Friday night.
However, I think collateral protection insurance is an issue where customers are quick to blame lenders for something that often isn't their fault. It's also a process that a lot of people don't seem to understand.
Let's start with the basics. The lender wants to make sure you keep insurance since they have interest in the collateral. They don't want to have to take back a wrecked car that is almost worthless. Accordingly, it's a part of loan contracts that you will maintain proper insurance and if you don't you give the lender the right to purchase insurance at your expense that covers the lender's collateral. All this is reasonable. But if you disagree, you shouldn't agree to the loan in the first place.
Usually there won't be a problem. There is an electronic exchange between lenders (or their third party trackers) and most of the big insurance companies. Also, a paper copy of your insurance is sent to the lienholder. Basically they are looking to match up your loan with an insurance policy under your name, the proper year, make, model and VIN of your vehicle, and make sure that the lienholder is listed as the loss payee. If there is a match, all should be fine. If there isn't, warning notices will go out. If things aren't resolved in time, an insurance policy is force-placed are your payments go up.
So what could go wrong when you have insurance but you still get a notice? I see two things most commonly. 1. Lienholder wasn't added to the policy. Typically the insurance company should ask the borrower when the insurance is being set up but for some reason this seems to be missed way more often than it should be. 2. There is a typo or mistake somewhere such as with the VIN.
If you ever get one of these letters, my advice is to pull out your actual policy and check it. If you see the error or don't see the lienholder listed on the policy, call your agent and get it fixed. That will solve the problem most of the time.
I could write a lot more about this but I'm going to stop here because, frankly, I don't know why I'm writing about this on a Friday night.
Chadstroma
Footballguy
Almost all banks have some things like this happening at all times because most banks have incentives for their people to sell products and services. Eventually, their shady practices are brought to light and they end up getting fired. I have seen it a few times where management will not ask too many questions when they should have because the sales numbers are helping them and as long as they don't know about it they don't need to take action.GroveDiesel said:
With Wells Fargo, it is really a failure of culture and honestly a failure of the system. On the scale of issues they had for as long as they had- most organizations I have worked with would have taken strong action to end it where it seems Wells just would fire the individuals and move on.
This one seems to be where Wells Fargo is force placing insurance on their car loans with their own insurance product. This practice should have been something that would have changed after the initial scandals but apparently management is stepping on their own feet and not taking strong action. The problem with this is that even in cases where force placed insurance need to be placed the perception, even more so in light of the previous scandal, is that Wells is up to no good. Add in the inevitable accidents and bad policy (a letter sent giving 10 days as someone posted saying it happened to them!) just add to that perception with them making money off of it- seals their doom.
I can tell you that their scandal has sent shockwaves through the banking industry. Other banks have taken actions to review what is done and how it is done to not only protect against individuals going rogue but to protect against perceptions as well.
Mister CIA
Footballguy
Juxtatarot
Footballguy
Yeah, the article didn't state the details but my guess is this is where the problem is. Normally, problems such as I mentioned should be able to be rectified without cost to the borrower. Even if a policy is added, the borrower should still be able to get a full refund if they can show they indeed had their own insurance. I'm curious to know where things broke down. Is this just a case of terrible customer service? How high up in leadership did they know they had a problem and did they willfully neglect to fix it since it was increasing revenue?
Courtjester
The Town Drunk
And it is their methodology of going about it. When I got my car loan, I provided Wells with proof of full coverage that showed coverage from "X to Y". I can see a letter maybe once "y" has passed to confirm you kept insurance, but when it becomes an every other month thing? No way. The worst part is each time I was given a short time window to provide this proof and it wasn't just a quick fix. You had to call the insurance agent and request they fax the info. Then I would call Wells and verify they got it (because I could just see them saying they never got anything). Then sometimes the agent wouldn't have done it right away and so it is another call to the agent then another call to Wells to confirm and all the while the imaginary deadline clock is ticking in the back of your head because you are about to be hit with this huge payment jump. I have excellent credit and like I said above, I have been insured with State Farm over 25 years, but every time I had to go through this, I felt like a deadbeat
I understand them wanting to make sure their collateral is protected, but the way they do it is a scam--plain and simple and it obviously ensnared a lot of people.
I understand them wanting to make sure their collateral is protected, but the way they do it is a scam--plain and simple and it obviously ensnared a lot of people.
