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The members of Wells Fargo's Risk Management Executive Committee were alerted in April and July 2012 to "critical issues" regarding the insurance program known as Indirect Guarantee Insurance, or IPC, a complaint naked Monday by a judge.
"Although Wells Fargo's senior executives have known for a long time that the CPI system caused harm to customers, Wells Fargo only stopped it in September 2016," the class action lawsuit said. by the customers.
Executives who would have been informed of Wells Fargo's imperfect insurance program include David Julian, the former chief auditor of the bank.
By telephone Wednesday, Julian declined to comment on the allegations or to clarify why he is on leave.
The lawsuit alleges that former Chief of Administration Pat Callahan, former General Counsel James Strother, and former Risk Officer Michael Loughlin were also briefed on auto insurance issues. These executives, all of whom retired in the last three years, could not be reached.
In a statement, Wells Fargo pointed out that the bank had terminated the insurance program in September 2016.
"Since then, we have been reviewing customer accounts and developing a correction plan – which we hope to finalize very soon – to provide the affected customers with the compensation they deserve," the bank said.
Up to 20,000 cars taken
Wells Fargo reserved $ 241 million in the third quarter to reimburse customers injured by the insurance program.
The class action auto insurance lawsuit was brought by more than a dozen borrowers who had insurance after obtaining a car loan from Wells Fargo.
Wells Fargo said that nearly 570,000 borrowers had been billed for auto insurance without their knowledge. Nearly 20,000 of these clients may have defaulted on their car loans or have their vehicles repossessed in part because of these unnecessary insurance costs.
Samir Hanef, a clinical social worker from North Carolina, said his Honda Civic had been taken over, even though he had made monthly payments for his auto loan.
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