WASHINGTON – U.S. Sens. John Thune (R-S.D.) and Bill Nelson (D-Fla.), who serve respectively as the chairman and ranking member of the Senate Committee on Commerce, Science, and Transportation, along with Sens. Jerry Moran (R-Kan.), and Richard Blumenthal (D-Conn.) the chairman and ranking member of the Consumer Protection, Product Safety, Insurance, and Data Security Subcommittee, asked the chief executives of National General Holdings Corporation (National General) and Wells Fargo & Company, in separate letters, to answer questions about their insurance sales practices, following reports that the companies “failed to ensure that customers were not charged for coverage if they already had their own policies.”
Excerpt from the letter to Wells Fargo & Co:
“On July 27, 2017, the New York Times reported that Wells Fargo charged more than 800,000 automobile loan customers for unnecessary collision insurance, in many cases without their knowledge. While it is understandable for lenders to take steps to protect loan collateral, it appears that Wells Fargo purchased additional coverage, and charged its loan customers for the premiums, in instances in which those loan customers were already in compliance with the terms of their loan agreements. Apparently, more than a quarter of those customers reportedly fell into delinquency due to these charges, and as many as 25,000 of them faced wrongful repossession of their vehicles as a result. The Wall Street Journal has subsequently reported that Wells Fargo plans to refund 570,000 customers approximately $80 million.”
The full letter to National General may be viewed here and the full letter to Wells Fargo & Co may be viewed here. The Commerce Committee and its Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security have jurisdiction over the regulation of consumer products and services, including automobile insurance.