Wells Fargo will pay millions in refunds for pet insurance, other add-on products
The fees affected hundreds of thousands of customers and the total cost could climb to more than $180 million.
(Bloomberg) – Wells Fargo & Co. is issuing refunds for monthly fees it charged on so-called add-on products that customers may not have fully understood.
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“We are reviewing add-on products sold to consumers by the bank or its service providers and if issues are found during this review, we will make things right with customers in the form of refunds or remediation,” Catherine Pulley, a Well Fargo spokeswoman, said in a statement Thursday. “We are working with our regulators on the ongoing review.”
Total cost could be $180 million, or more
The fees affected hundreds of thousands of customers and the total cost could climb to more than $180 million, the Wall Street Journal reported earlier, citing people familiar with the matter. Pulley declined to comment on the potential costs. The bank said in a May regulatory filing that it was reviewing the products and providing remediation for problems it found.
Related: Wells Fargo to compensate clients for unwanted car insurance
Wells Fargo stopped selling the add-on products last year, said a person briefed on the matter, who asked not to be identified. Add-on products often come attached to financial accounts and can include identity theft and debt-protection services, pet insurance and legal advice.
Scandal erupted in 2016
Chief Executive Officer Tim Sloan, who took the helm after scandals began erupting in 2016, continues to face costs from cleaning up the bank’s messes. The lender booked more than $300 million of expenses in the second quarter for refunding clients of its wealth management and foreign-exchange trading units, and in April agreed to a $1 billion settlement that covered missteps in Wells Fargo’s auto-lending and mortgage units.
The Consumer Financial Protection Bureau is probing the add-on fees, the Journal said. The bank said in the May filing that it was working with regulators on the review of the add-on products. In 2015, the company entered into a consent order with the Office of the Comptroller of the Currency over add-ons, the bank has said.