Wells Fargo & Co. customers accused the bank in a lawsuit of forcing them to pay for unnecessary auto insurance that drove some of them so far into a financial spiral that their vehicles were repossessed.

The complaint comes after a year of hand-wringing and internal changes brought on by an earlier snafu at Wells Fargo. Bank workers opened up possibly 2.1 million checking and credit card accounts without customers' permission over about half a decade, and the bank paid $185 million to regulators to settle.

Now, the bank is accused of bilking millions of dollars from “unsuspecting customers who were forced to pay for auto insurance they did not need or want,’’ pushing almost 250,000 of them into delinquency and resulting in almost 25,000 vehicle repossessions, according to a proposed class-action lawsuit filed Sunday in San Francisco federal court.

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Indianapolis consumer Paul Hancock claims in the lawsuit that Wells Fargo received kickbacks from National General Holdings Corp., which isn’t named as a defendant, through shared commissions on the policies. The New York Times reported Wells Fargo stopped sharing in commissions from the insurance sales in February 2013.

“The revelation of this latest breach of customer trust appears to fit right into the Wells Fargo playbook of dirty deeds, and sadly comes as no surprise,” Roland Tellis, one of Hancock’s lawyers, said last week when he announced his firm was investigating the bank. Keller Rohrback LLP, the law firm that’s behind the class action over Wells Fargo’s retail-bank accounts scandal, also said it’s investigating the auto insurance issue.

Coverage checks

When customers took out Wells Fargo loans to purchase vehicles, the bank and the insurance company either didn’t check whether clients already had coverage or ignored the information, according to the complaint. Collateral protection insurance policies were created for customers, and Wells Fargo then would add premium charges to customers’ auto loan bills, often without notifying them, according to the lawsuit.

Wells Fargo last week said it may have pushed thousands of car buyers into loan defaults and repossessions by charging them for the unwanted insurance. The bank said an internal review of its auto lending found more than 500,000 clients may have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own policies. The firm said it may pay as much as $80 million to affected clients — with extra money for as many as 20,000 who lost cars, “as an expression of our regret.”

The lender is still struggling to overcome the fake-accounts scandal in its community bank and said last week that the division’s new leader is cutting about 70 senior executive jobs. The accounts scandal led to the ouster last year of Wells Fargo’s longtime Chief Executive Officer John Stumpf and has cost the bank at least $520 million in fines, remediation, consultants and civil litigation — including $142 million to customers who sued the bank over the accounts.

The bank said it was sorry “for any inconvenience” caused by the auto insurance program. It’s in the process of “making things right,” Wells Fargo said in an emailed statement. The bank said it discontinued the insurance program in September 2016 after finding errors.

A representative of National General had no immediate comment.

Hancock said Wells Fargo placed a CPI loan on a vehicle he bought in February 2016, charging him $598. Hancock “repeatedly contacted Wells Fargo to inform them that he had the required insurance through an auto insurance policy from Allstate,’’ according to the complaint.

Wells Fargo didn’t credit his account for the improper charge or refund the money, he said. Instead, Wells Fargo kept charging him for the policy and he was charged a late fee, Hancock said.

Hancock seeks restitution, disgorgement of all profits and three times damages incurred by all plaintiffs.

Wells Fargo last week said it would start sending letters and refund checks in August to customers with policies placed from 2012 to 2017 that it determines were harmed, and expects the process will be complete by the end of the year. The lender also promised to work with credit bureaus to amend customers’ credit records.

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