Wells Fargo faces criticism as new scandal uncovered

Financial services major Wells Fargo is facing a new wave of criticism after a revelation that the bank spent years in enrolling unknowing borrowers in costly collateral protection insurance (CPI) program.

Nearly 800,000 Wells Fargo auto borrowers were allegedly inappropriately charged for insurance. It rattled investors, dragging its stock down 2.6 per cent on Friday.

NYC Comptroller Scott Stringer, who is responsible for overseeing public pension funds that hold nearly 11.6 million Wells Fargo shares, said it was a “full-blown” scandal again.

Attacking the bank, Stringer said, “This is a full-blown scandal — again. It’s unbelievable, outrageous, sad, and yet quintessential Wells Fargo. This isn't just a corporate debacle. It's caused real human harm.”

Stringer asked Wells Fargo to immediately install a new independent chair and disclose more information.

The new scandal surfaced just a day after Wells Fargo announced its decision to reimburse $80 million to nearly 570,000 affected customers who qualified for a refund.