Clark Howard

Wells Fargo's latest controversy: Charging unsuspecting customers for pet insurance, more

Wells Fargo's many scandals continue to pile up. Most recently, the San Francisco-based institution has drawn the attention of the Consumer Financial Protection Bureau, who is looking into whether the bank deceived customers by charging them for add-ons they never asked for, according to the Wall Street Journal.

Wells Fargo is in the midst of refunding the add-ons, which were for things like pet insurance and legal services, to “hundreds of thousands” of customers, the Journal reports. That means the embattled bank may be out of tens of millions of dollars for the caper, which has been going on for an undisclosed number of years.

Wells Fargo may refund latest unsuspecting customers charged for pet insurance & more

The bank is “reviewing add-on products sold to consumers by the bank or its service providers and if issues are found during this review, we will make things right with customers in the form of refunds or remediation,” Wells Fargo spokeswoman Catherine Pulley told the Journal.

RELATED: 5 ways Wells Fargo ripped people off in 2017

The add-ons are just the latest controversy the bank has dealt with in the last couple years. There is evidence that the brouhahas are taking a bite out of the bank's bottom line. The institution's profits sank 12% in the second quarter, according to its latest earnings report.

The bank reported recently that operating expenses were at $619 million and revenue was down about a half billion dollars.

In addition to disappointing investors, the bank reported far fewer deposits and loan originations, a sure sign that’s customers are being turned off.

Wells Fargo earnings report shows scandals having negative effect

Wells Fargo CEO Tim Sloan painted the earnings report in a positive light, saying in a written statement, "Our progress included making further improvements to our compliance and operational risk management programs; hiring a new Chief Risk Officer" and other things.

Wells Fargo's troubles stem from several missteps. Earlier this year, the Federal Reserve cracked down on the bank for what it called "widespread abuses."

Money expert Clark Howard says if you want the best bang for your buck, then you should leave the huge banks and opt for credit unions. Although the “big banks” hold about 40% of all U.S. commercial bank assets, they come with all types of potential problems for customers, as Wells Fargo’s case illustrates.

Here are several banking alternatives to consider.

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