Wells Fargo will pay out $80 million for hidden auto insurance fees in their loans, and $142 million for sham accounts. The Wells Fargo lawsuit attorneys at Steinger, Iscoe & Greene can help you get the compensation you deserve.
Since the early 2000s, Wells Fargo has been embroiled in a number of scandals. Most recently, class action lawsuits have been filed regarding the bank’s hidden auto insurance fees in their auto loans, and the sham accounts they opened in customers’ names. Read on to learn more about these and other scandals Wells Fargo has been involved in, and contact us today to discover if you are eligible to be part of a class action lawsuit against the bank.
California-based bank Wells Fargo has a history of mistreating its customers. The latest scandal involves auto loans that had hidden car insurance fees attached to them. Now, the institution is being investigated for fraud and racketeering for these allegedly fraudulent fees.
In total, more than 800,000 Americans who obtained car loans through Wells Fargo between January 2012 and July 2016 were charged for auto insurance they didn’t want, need or request, according to the New York Times.
These fees caused nearly 275,000 customers to become delinquent on their loans, and resulted in nearly 25,000 wrongful repossessions. According to reports, some of those affected were active military service members. Wells Fargo said it will pay a total of $80 million to reimburse those affected.
Within the paperwork for auto loans from Wells Fargo, there is a section requiring customers to have comprehensive coverage on their vehicles. While this in itself is not uncommon, the bank used this section as a reason to purchase coverage for the customer and pass on the cost if there was “no evidence” the customer had adequate insurance. Wells Fargo says they did not have proper internal controls to prevent these charges if customers had outside insurance.
Wells Fargo purchased this coverage through National General Insurance. The bank would share customers’ information with the insurance company, who would then automatically tack on the coverage to the auto loan. It was then left up to the customer to notify the bank they were being charged for insurance they didn’t want.
Many customers did give notification to Wells Fargo of the extra charges, but were still unable to get them removed. Moreover, other customers never became aware of the issue. Because loan payments were often automatically deducted from their bank accounts, those customers were unaware they were being overcharged — and Wells Fargo never informed them of this policy.
In a much more public scandal, it was discovered that Wells Fargo associates were creating sham accounts in customers’ names in order to meet their quotas. According to the bank, unrealistic sales goals were set for their associates. In order to meet these goals, approximately 3.5 potentially fake credit card and bank accounts were opened. Nearly 200,000 of those were charged with unnecessary fees, which customers were held liable for. Wells Fargo said it will pay over $6 million to customers in refunds for the fees, but that’s not enough.
The bank has also agreed to a $142 million class action lawsuit. Anyone who believes a fake account or line of credit was opened in their name between May 2002 and April 2017 may be eligible for payment. Those who applied for identity theft protection during that time may also be eligible.
Any fees you paid on fake accounts will be paid back in the settlement, if you haven’t been reimbursed already. If the bank opened a credit line in your name, you’ll also get a payment based on:
After all of these rates are calculated, all customers affected by the sham accounts will split the rest of the settlement — at least $25 million. Payments will be determined by the number and type of fake accounts opened in the customer’s name. Call us today to learn more about how you can get the compensation you deserve.
Wells Fargo has recently come under investigation for suddenly and improperly freezing or even closing legitimate bank accounts. The bank says they did so when they detected suspected fraudulent activity by account holders or third parties, but customers were given no notice before their accounts were suddenly inaccessible.
The bank has also been accused of unfair overdraft practices. According to class action suits across the country, Wells Fargo would change the order of debit card transactions from highest to lowest dollar amounts to increase the number of transactions that would trigger overdraft fees. Moreover, Wells Fargo refused to allow customers to opt out of overdraft protection programs. Currently, the bank is petitioning to take the case into arbitration instead of fighting it in court.
In yet another scandal, Wells Fargo has been accused of charging customers extra fees when their mortgage applications were delayed, even when the delays were caused by the bank. The fees are known as “rate-lock extension fees.” When applying for a mortgage, a borrower agrees to a certain interest rate. If 30-45 days elapses before the loan is approved, the borrower must pay a fee to keep the same interest rate. If the bank causes the delay, they are supposed to absorb the fees, not charge the borrower. Multiple class action lawsuits have been filed against the bank for this practice.
Other lawsuits and scandals have rocked Wells Fargo in recent years. For instance, a division of the bank settled a lawsuit stating they violated the Telephone Consumer Protection Act. Earlier this year, a class action was settled regarding the bank’s illegal inspection fee practices. The settlement is currently being appealed.
If you or someone you know has suffered financial damage due to Wells Fargo’s illegal or improper practices, including hidden insurance fees, sham accounts and more, you may be entitled to compensation. At Steinger, Iscoe & Greene, we have recovered over $1 billion for our clients, and we are ready to fight the bank on your behalf. Contact us today for a free, no-obligation consultation to learn more about your legal action and our potential class action lawsuit against Wells Fargo.