Report: Wells Fargo Imposed Home Warranties on Unsuspecting Mortgage Customers

Wells Fargo and home warranty company American Home Shield (AHS) have been accused in dozens of consumer complaints filed online and with the Federal Trade Commission of charging unsuspecting mortgage customers with a bill for an “optional” home warranty product.consumer protection lawyer

The issue was first reported by The Capitol Forum, a paywall-blocked investigative outfit catering to investors and policymakers. Customers who were surprised to discover the bill on their mortgage payments found it difficult if not impossible for Wells Fargo to remove it.

One customer told investigators he had never been contacted with any offer, nor did he approve it. Yet he was billed an extra almost $50 on his mortgage bill. The bank promised to fix the issue, but the charge showed up again the next month too.

A spokesman with the FTC would not confirm its receipt of the complaints nor any investigation or action into it. As our Miami consumer protection lawyers know, such complaints tend to be just the very tip of the iceberg. We find in many instances, those who filed complaints only represent a small percentage of actual wrongdoing.

Wells Fargo released a statement to The Intercept indicating they terminated the marketing arrangement with AHS that was pushing this service some five years ago. The bank also indicated AHS was peddling a number of other optional products to mortgage consumers. However, it’s not clear during this time how many consumers may have been previously impacted without any idea. The only known cases of an issue are mortgage consumers who discovered the issue and were concerned enough to file a report.

It’s also not clear to our consumer rights attorneys what other “optional” products AHS was selling or for which Wells Fargo billed. The bank says consumers were aware of what they were purchasing, and that securing coverage meant there was a written or recorded verbal agreement when it was enrolled. The bank promised to investigate specific complaints.

This is not Wells Fargo’s first time around the block with these type of allegations. Just in the last few months, the bank has been accused of imposing:

  • Forced-place collision insurance;
  • Forced-place guaranteed asset protection insurance;
  • Covertly altering mortgage terms for homeowners undergoing bankruptcy;
  • Altering records in order to charge mortgage applicants for the bank’s own delay in processing applications;
  • Stealing from mortgage bond investors.

All of this excludes another well-known recently scandal wherein Wells Fargo reportedly charged as many as 3.5 million customers for new accounts they did not authorize, and then slammed them with hidden fees.

AHS, meanwhile, is a big name in the home warranty industry. Its coverage is for the repair and replacement of major appliances, electrical systems, air conditioning units and more. Fixed monthly payments allow customers to get free service from the company’s contractors. The company rakes in some $1 billion a year. It’s not rated well by consumers, who on the whole complain the company gives a myriad of flimsy excuses for not covering their claims or having unusually long wait times – with little to no hope of getting an actual person on the other end.

Customers who do end up having their claims approved say they have had to grapple with extensive delays in services or charges for uncovered expenses.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley 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.

Additional Resources:

THERE’S A NEW WELLS FARGO SCANDAL: THIS TIME IT’S THE TRUCOAT, Aug. 12, 2017, By David Dayen and Ryan Grim, The Intercept

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