Sketchy bank might owe you money

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South Carolinians could be protected from Wells Fargo

By ROBERT MEYEROWITZ

Wells Fargo, the world’s second-largest bank, is facing scrutiny for its unsavory practices yet again, now by the Federal Reserve Bank of San Francisco — and this time it could affect South Carolinians who’ve had auto loans through the bank.

Not so long ago Wells Fargo was the world’s largest bank — until it fell to second place by market capitalization behind JP Morgan Chase last year, once it became widely known that it had been involved in the creation of over 2 million fake bank accounts by thousands of Wells Fargo employees.

Several successive scandals have followed, which the bank has described as errors and oversights, although all have seemed to benefit the bank at the expense of its customers.

Now, according to The New York Times, the bank failed to refund guaranteed auto protection, or GAP, insurance money to people who paid off car loans early.

“It is not mandatory for car buyers to carry GAP insurance, which typically costs $400 to $600,” The Times reports. “But car dealers push the insurance, and lenders like it because of the protection it provides. When borrowers pay off the loans early, they are entitled to a refund of some of the GAP insurance premium because the coverage they paid for is no longer needed.”

Laws in nine states say unused insurance money must be refunded. South Carolina is one of them.

The latest scandal comes on the heels of revelations that Wells Fargo forced unneeded collision insurance on 800,000 of its auto loan customers.

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  • Laird

    A small correction: Wells Fargo is not “the world’s second-largest bank”; in fact, it isn’t even the second largest bank in the US. It is the world’s tenth-largest bank, and the US’s third largest (all in terms of total assets. See http://www.businessinsider.com/the-biggest-banks-in-the-world-2017-4/#17-barclays-uk-150-trillion-7 and http://www.bankrate.com/banking/americas-top-10-biggest-banks/#slide=1.

    • Robert Meyerowitz

      I think if you look again at the story, we were using the measure by market capitalization, rather than assets. But you’re right, they’re both good measures.

      • Laird

        Sorry, you’re right; I missed the “by market capitalization” in the second paragraph (I was focused on the first). Although I’m not sure that market cap is the best measure, given that the 4 largest banks in the world (by total assets) are in China, so the measure of their market cap is questionable. But it’s clear that Wells Fargo is huge, and is certainly among the largest in the world!