Reuters reported on July 28, 2017, about the latest financial scandal hitting wells fargo. The controversial bank holding company has been mired in a fresh Auto Insurance scam, which has again put its dubious business practices under the scanner.
Sources suggest that the firm has been accused of hoodwinking its customers into buying costly auto insurance without their knowledge by deploying unscrupulous sales techniques.
The gravity of the charges leveled against Wells Fargo stems from its complete cognizance of the theft, instead of being unaware of it.
This was revealed by Franklin Codel, Head of Consumer Lending which has put mounting pressure from irked customers, investors, and shareholders, on the company.
There are also legal authorities including lawmakers and consumer rights advocates, who demanded an immediate reply from Wells Fargo and an inquiry into the matter. While speaking to Reuters, Coldel said, "Wells Fargo first became aware of the potential problems a year ago, when the auto lending business began receiving an unusually high number of complaints, following which the auto insurance program was quickly suspended and the problem escalated to the senior management, the board and regulators."
However, Codel defended the company's delayed public disclosure decision.
Labeling it as planned, rather than a knee-jerk reaction, Codel clarified that it was deliberately taken by Wells Fargo to assess the number of those impacted so as to arrange for their reimbursement.
This isn't the first time for Wells Fargo
The scam, which is said to have impacted at least 800,000 Wells Fargo customers is an add-up on the ongoing list of controversies in which the financial services corporation is currently embroiled.
The most recent was a fraudulent account scandal in September 2016 that forced Wells Fargo to agree to cough up $110 million in settlement to customers who had fake bank accounts opened in their names by employees after forging their signatures.
Similarly, apart from the general public, the company in the past has not refrained from even victimizing the defense personnel.
Wells Fargo made headlines last year for exploiting military veterans through illegal repossession of their property without a legal court order - a revelation which the company's former CEO John Stumpf himself made.
Wells Fargo stock takes a hit
Wells Fargo stock took a hit following the important news, with its shares closing at $53.30, a clear 2.6 percent fall from $54.71, as reported by Zacks.
