Big bank in hot water over kickback allegations

by Ryan Smith12 May 2015
Wells Fargo is once again in hot water, this time over force-placed insurance.

The banking giant, along with perennial defendant Assurant, is being sued in federal court over an alleged force-placed insurance kickback scheme, in which plaintiffs claim that Assurant artificially inflated premiums on insurance in order to pay kickbacks to Wells Fargo.

Three plaintiffs, suing Wells Fargo and Assurant individually “and on behalf of all others similarly situated,” claim that when their homeowner policies were not renewed, Wells Fargo force-placed policies which cost significantly more than their previous insurance – in some cases more than twice as much – covered only the structure of the home and protected only Wells Fargo. They further allege that Wells Fargo received a commission for the more expensive policies.

Wells Fargo and Assurant dispute the allegations and moved to dismiss the charges, but the motion was denied by U.S. District Court Judge David R. Herndon.

This isn’t Assurant’s first rodeo when it comes to allegations of dodgy insurance practices. In April, the insurer, along with embattled servicer Ocwen Financial, agreed to pay $140 million to settle similar claims.


  • by cheryl m | 5/12/2015 10:57:55 AM

    Odd, I still have a bar coded letter from Wells from Oct. 1 2008 forcing me to pay their insurance because they were unable to read the loss payee clause on my ins. binder. Wow they're still doing this in 2015? Finally stopped after 7 faxed request and numbers of calls oh and a few threats.

  • by Dominick F Sammarone | 5/12/2015 11:42:36 AM

    This has been against the law for years. I guess too big to fail also means to big to follow the rules. People still complain every day about this bank. People still also take mortgages from this bank and deposit their hard earned pay check in this bank every Friday religiously. Think about this on Friday or when you're standing at the Big Banks ATM machine. When will the American "sheeple" wake up?

    (“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. I believe that banking institutions are more dangerous to our liberties than standing armies.” –Thomas Jefferson)

  • by jburns | 5/12/2015 12:45:01 PM

    It is simple, don't let your home owners insurance lapse, make your payments. Don't force the lender to have to purchase insurance to protect their investment. Forced placed hazard insurance has been a threat for the last 40 years that I can remember, it is an incentive to not let it happen. Quit blamming other people and accept resposibilty. That's just one example why not everyone should own a home.


Should CFPB have more supervision over credit agencies?