July 29 (UPI) — Wells Fargo & Co. will refund about $80 million to approximately 570,000 customers who were improperly charged for car insurance, it announced.
A statement Thursday said the bank, working to rebuild its public image after a fake accounts scandal, will send about $64 million in remediation to customers in the form of refund checks, and will make an additional $16 million in account adjustments.
Customers were charged for insurance to safeguard the bank from damage to vehicles used as loan collateral, although the customers already had the necessary coverage, TheStreet.com reported on Thursday.
The insurance, known as CPI or collision protection insurance, was purchased by Wells Fargo from third-party vendors if there was no evidence the customer had already purchased insurance. An internal review indicated many instances in which customers were charged for CPI insurance even though they had arranged their own vehicle insurance.
In some cases, the Wells Fargo statement said, the additional insurance cost led to defaults and vehicle repossessions. The bank added it would work with credit bureaus to correct customers’ credit records in those cases.