Wells Fargo won’t finish paying back money it owes to more than half a million customers until at least 2020.
The bank owes money to an estimated 600,000 customers it wrongly charged for auto insurance they didn’t need. In April, the bank received a $1 billion penalty from US regulators when it admitted to wrongly charging the customers. The agreement between Wells Fargo and regulators envisioned that the customer payouts would be completed in a matter of months, according to Reuters.
The issue stems from Wells Fargo’s practice of adding insurance for customers who bought a car through the bank. Drivers who financed through Wells Fargo but let their auto insurance lapse could be charged with “force-placed” insurance policies.
Wells Fargo enrolled about two million customers in force-placed policies – more than a quarter of which were unnecessary, according to Reuters.
In August, Wells Fargo said it expected to pay back about $212 million to wrongly charged customers.
“We regret how this issue impacted our customers,” said Wells Fargo spokeswoman Catherine Pulley. “We are finalizing our remediation plan, which is designed to provide each customer with appropriate compensation for their individual circumstances. We look forward to providing our customers with the full compensation they deserve.”
