Wells Fargo’s “TruCoat” Scandal
If you’re old enough to remember the 1990s, you may recall the Cohen Brother’s 1996 indie classic, “Fargo.” In one of its iconic scenes involves a car sales tactic wherein a hapless car salesman and a customer haggle over the $500 add-on benefit of “TruCoat.” The customer says he doesn’t want it, and specifically told the salesman he didn’t want it. The salesman insists it’s a worthwhile benefit, and anyway, the factory has already installed – and there is nothing he can do to remove it. He finally offers to take $100 off the price of the TruCoat, which the customer didn’t want in the first place. Wells Fargo customers may well be finding themselves in a very similar scenario, amid a rash of recent scandals rocking the nation’s third-largest bank (and the largest provider of mortgages in the U.S.).
One of the most recent of those cases involves the bank’s teaming up with a home warranty company, which in turn forced its product on customers who weren’t expecting it. Several dozen consumers who filed online complaints with the Federal Trade Commission, alleged they had no idea they were being billed for an optional service they never ordered. When they contacted Wells Fargo to get the bank to get the charge removed, they found a great deal of difficulty, seemingly echoing the “Fargo” car salesman’s refrain, “Yeah, but that TruCoat…”
Consumers said they were not contacted with any offer about the contract, nor did they ever approve it. Yet through Wells Fargo as the mortgage provider, they were charged extra on their mortgage bill. Even after customer’s contacted the bank, with assurances the added cost would be removed, the charges continued to appear.
Wells Fargo for its part says it no longer works with that third-party warranty service (American Home Shield), and hasn’t for five years. Still, what our Miami consumer rights lawyers still don’t know is how many unsuspecting consumers may have been affected. All we have at this point, absent an independent review, are the consumer complaints filed by those who not only spotted and recognized the upcharge, but called to hold the bank accountable for it. Many people don’t look that closely at their monthly mortgage payments, and many have it set up for direct deposit. Having those funds siphoned off the top may go generally unnoticed, though certainly it could cause serious problems for some who have no idea that money isn’t in their bank accounts, as they may (and have every right to) be expecting.
A statement from a Wells Fargo spokesperson to The Intercept indicated this could be just the beginning. AHS was involved in peddling a number of other optional products through the bank, and it’s unclear at this point how many of those products may have been tacked onto customer accounts absent any authorization. The bank said it has been slashing these types of third-party arrangements for the last several years, declining to charge customers additional fees via their monthly mortgage. That would appear to indicate the bank was aware of problems (certainly, it knew of the FTC complaints). Yet it does not appear to have made any moves as of yet to call for a third-party investigation or to find out just how many customers were affected and pay them back.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.