Wells Fargo Settles for $386 Million in Auto Insurance Suit
Wells Fargo will reportedly pay customers a minimum of $386 million to settle class-action claims that the bank covertly signed customers up for auto insurance they did not want or need.
Back in the summer of 2017, the bank found itself implicated in widespread auto insurance and mortgage lending abuses. Over a year later, Wells Fargo was slapped with a $1 billion fine from the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency to settle U.S. investigations into the company’s insurance and mortgage practices.
While the auto insurance plan ended in 2016, roughly 800,000 customers (or 600k by Wells Fargo’s estimates) were believed to be affected by the auto insurance issue over roughly a four-year period. For most, that meant being overcharged for insurance they didn’t need., but some customers ended up with their vehicles repossessed and their credit rating demolished, promoting the class-action suit.
The complaint claims the business’ suspect practices caused nearly 275,000 customers to become delinquent in their payments and caused the illegal repossession of nearly 25,000 vehicles. Wells Fargo has continued to deny any intentional wrongdoing, claiming it settled to avoid the cost and risks stemming from litigation. Reuters reports that court documents stipulate the firm is also required to pay $36.5 million for the plaintiffs’ legal costs. The bank called the settlement “an important step in making things right for customers.”
“We will continue sending individualized letters to customers that clearly set out the remediation amount due to them, as well as a check for that amount,” the bank said in a statement.
Financial underwriter National General Insurance Co. is expected to pay an additional $7.5 million, making the total customer payout over $393.5 million. The details of the settlement were disclosed last week via filings in U.S. District Court in Santa Ana, CA, and are still dependent upon a judge’s approval.
[Image: Kristi Blokhin/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Makes your local BHPH shark look like a solid citizen.....
"Let the free market decide" says every Repub/Libertardian shill ever. The free market usually decides to F you in the A.