Although Wells Fargo Dealer Services is investigating vendor oversight practices in response to its recent force-placed insurance scandal, the coverage provider in question — National General — claims it was in the right, Barry Karfunkel, chief executive of National General said during an earnings call.
National General feels like “they got thrown under the bus by Wells,” an insurance analyst told Auto Finance News on the condition of anonymity. “National General has a high degree of confidence that they have tracked everything correctly,” he said. “Whereas with Wells, they were pretty upfront in saying, ‘Yeah, we goofed.’”
National General was responsible for tracking, notifying, and placing collateral protection insurance (CPI) for Wells Fargo consumers who never bought or later cancelled their previous collision and comprehensive auto insurance policies. However, 570,000 to 800,000 consumers between 2012 and 2016 were charged for the policy even though they had already purchased coverage elsewhere.
A separate CPI provider told AFN it’s possible that faulty tracking on the part of the insurer could lead to false payments and improper refunds at Wells Fargo, however, he had no information about the specific scandal at the bank.
“These [allegations] are not actions that National General is responsible for or could even really do,” the analyst said. “National General does not repossess cars; Wells does. National General does not send funds into or out of client’s bank accounts; Wells does.”
A full independent study of National General’s practices has not been released. Wells Fargo declined to comment on this story.
For more coverage of Wells Fargo’s insurance practices click here.
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