Wells Fargo, National General Hit with Another Lawsuit Over Unnecessary Auto Insurance

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Wells Fargo and National General Insurance Company are staring down yet another proposed class action alleging they stole millions through a scheme to force unnecessary auto insurance on customers. The complaint cites recent revelations from the defendants that more than 800,000 auto loan customers were hitched to unneeded car insurance policies. As a result, roughly 250,000 customers fell into delinquency, and 25,000 vehicles were reportedly repossessed, the case reads.

At issue in the complaint are policies commonly called Collateral Protection Insurance (CPI), which resemble policies taken out by vehicle owners to cover damages in the event of an accident. The lawsuit says that if proof of insurance was not received by the defendants’ CPI provider, i.e. National General, ordinarily notices would go out to borrowers prompting them to obtain proper coverage. That’s not what happened, the lawsuit argues: 

In addition to being unnecessary, the lawsuit claims these CPI policies were more expensive than if proposed class members obtained their own protection. Customer complaints were met with refusal from the defendants to remove the allegedly illegal charges, the case asserts.