Readers may remember a year ago when the news came out that Wells Fargo Banks were signing up customers for accounts without the customer’s knowledge or consent. The bank would then tap the customer’s account for fees to cover the unauthorized accounts. Some reports say these unauthorized accounts totaled over 2 million. If each of these accounts brought in $5 per month fees then the bank was stealing upwards of ten million dollars a month.
Fast forward one year. Recently news came out the same Wells Fargo Bank has been selling customers bogus insurance policies without their knowledge–or need of the policies.
The way it worked. If a customer came in to the bank to borrow money to purchase an automobile the bank would loan the money and instruct the borrower to be sure to insure the vehicle. Normally the customer would do just that. No matter, the bank would initiate its own insurance policy for the same vehicle. The premium for this unneeded policy would be added to the borrowers note and the borrower would pay it monthly along with his car payment.
Naturally the bankers would make a commission off the UN-needed policies. Often this added, unnecessary premium would put the borrower over his budget and often he would have the car repossessed for failure to make the payments.
If these scams were done by other industries or individuals someone would likely go to jail. With the banks being “too big to fail” they get off scot-free and move on to the next scam.
The question is: are the banks getting special treatment by prosecutors or are the laws governing the banks so lenient as to make anyone going into a bank a sitting duck for more of these scams.