The New York Times by Chad Bray, August 8th, 2017

Its reputation is already tarnished by a fake accounts scandal. Now, Wells Fargo is facing questions for a second time in a month for its insurance practices.

The Federal Reserve Bank of San Francisco is examining the bank’s practices around a specialized insurance product called guaranteed auto protection insurance, known as GAP. The bank is accused of not refunding insurance money when consumers paid off their auto loans early, according to people briefed on the inquiry.

The insurance is intended to make up the difference between the value of a car and the value of the loan still owed if something happens to the vehicle before the debt is paid.

While not mandatory, auto dealers often push consumers to buy the product and lenders like the security it provides. When a loan is paid off early, borrowers are entitled to a refund of some of the premium.

“During an internal review, we discovered issues related to a lack of oversight and controls surrounding the administration of Guaranteed Asset Protection products,” said Jennifer A. Temple, a Wells Fargo spokeswoman. “We are reviewing our practices and actively working with our dealers and have already begun making improvements to the GAP refund process. If we find customer impacts, we will make customers whole.”

The latest scrutiny comes less than a month after the lender was found to have sold its customers unnecessary collision insurance as part of their auto purchases.

Wells Fargo, one of the largest banks in the United States, is struggling to rebuild its reputation after it disclosed last year that its employees, under pressure to meet aggressive sales goals, created millions of fake accounts in the names of real customers.