Senator Puts Wells Fargo on Hot Seat over Costumer Refunds

Senator Elizabeth Warren put Wells Fargo & Co on a hot seat to explain reported problems in issuing refunds to customers who were charged for auto insurance and mortgage fees without their knowledge.

The Massachusetts Democrat, who has been highly critical of the bank and its management over numerous issues with customers, sent a letter to the bank’s CEO Tim Sloan this week, pressing him about botched refunds.

“Wells Fargo has stolen money from its customers,” Warren wrote. “It has caused thousands of people to spend valuable time and money trying to deal with a problem Wells Fargo created. And now the bank is providing the customers it harmed with inaccurate information or making them jump through hoops just to get their money back.”

In late 2016, a fake accounts scandal made into the headlines that involved the bank’s employees opening accounts without customers’ knowledge. It was an effort to meet sales goals but an issue that has affected thousands.

Last August, Wells admitted that it sold auto insurance to 600,000 customers without proper disclosures. Some customers were also charged with insurance premiums inappropriately.

A few months later, the bank announced that it had charged 110,000 customers to extend mortgage rate locks between 2013 and 2017 even though the bank was the source of processing delays that made extensions necessary.

“You have an obligation to your customers to improve your efforts so that every customer harmed by Wells Fargo is fully and promptly compensated with minimal hassle and frustration,” wrote Warren in the letter.

Last week, sources reported that Wells had sent erroneous letters to 38,000 customers who had been forced to buy unneeded auto insurance. The letters were unnecessary and did not contain refunds the bank has said it would pay.

Wells spokeswoman Catherine Pulley said that a vendor caught a coding mistake that resulted in the letters.  The bank would “work with our vendor to ensure these customers receive the appropriate communication – including any refunds they’re eligible for,” said Pulley.

Warren asked Sloan to respond to her by February 28 with answers, including detailed descriptions of the bank’s “process for identifying and notifying consumers” due refunds and how much money Wells has budgeted to compensate them.

“We are focused on making things right for our customers and ensuring this large-scale remediation happens correctly and as quickly as possible,” Wells’ Pulley said in a statement in response to the news.

Pulley also said that the company is in the middle of issuing auto insurance refunds and expects to be “substantially” done by mid-year.

It has also begun to issue refunds to customers who directly reached out to question the mortgage fee, and is working with regulators to get refunds to the remaining people affected.

“We will address any questions Senator Warren or her colleagues on Capitol Hill have about these plans underway,” Pulley said.

Wells Fargo shares jumped 2.67% to close at $59.55 in Wednesday’s trading session.

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