Regulators are reportedly investigating whether the bank deceived its customers when it sold add-on products like legal services and insurance
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Wells Fargo is under the microscope again. The megabank is refunding hundreds of thousands of customers for add-on products like insurance or legal services, sources say. Federal regulators are reportedly investigating whether customers who received the add-ons were deceived into purchasing them.
The refunds run to tens of millions of dollars, Dow Jones reported, citing people familiar with the matter. The Consumer Financial Protection Bureau is reportedly looking into the issue, according to CNBC.
Wells Fargo first disclosed issues with its add-on products in a regulatory filing for the second quarter of 2017. In its most recent filing in May, the bank said practices related to its add-on products were the subject of a 2015 consent order with the Office of the Comptroller of the Currency, according to CNBC.
“We are reviewing add-on products sold to consumers by the bank or its service providers, and if issues are found during this review, we will make things right with customers in the form of refunds or remediation,” Wells Fargo spokeswoman Catherine Pulley told CNBC. “We are working with our regulators on the ongoing review.”
Regulators are investigating whether add-on customers were deceived, and their general awareness of the products and their ability to cancel them, Dow Jones reported.
Wells Fargo’s scandals have already taken a bite out of its bottom line. Earlier this month, the bank announced that operating losses spiked 77% last quarter, while its profits dropped 12%.
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