update December 28, 2018
Wells Fargo could owe you money, yet again. Investigators found Wells Fargo cheated mortgage customers and auto loan customers and now has to repay those who were harmed. The Consumer Financial Protection bureau hit the bank with a $1 billion fine and the Comptroller of the Currency fined the bank $500 million and ordered it to clean up its management practices. There is a new settlement as of December 28, 2018 and we explain all of that here.
Wells Fargo previously paid a $100 million fine for opening credit card accounts for 3.5 million customers who did not authorize them to do it.
In the latest settlement with the Consumer Financial Protection Bureau (CFPB), Wells Fargo acknowledged it overcharged mortgage customers who needed to extend the period for locking-in an interest rate. Although an internal bank audit, in 2013, found the bank routinely over-charged customers for extending the rate-lock, Wells Fargo continue to cheat customers through October 2016.
The settlement also lays out how the bank’s bad practices affected auto loan customers going back to 2005. Wells Fargo forcibly placed insurance on the vehicles of about 2 million people who took auto loans with the bank. What the insurance industry calls forced-placed insurance typically is ordered by a lender when a customer’s insurance policy lapses.
But Wells Fargo apparently ordered blanket forced-placed insurance policies for hundreds of thousands of auto loan borrowers who already had insurance, or replaced lapsed insurance policies with new ones.
The additional cost to some consumers caused late payments and in some cases led to borrowers losing their cars to repossession.
The settlement with the CFPB and the Comptroller of the Currency requires Wells Fargo to clean up its management practices and to repay customers who have been harmed.
Wells Fargo has 120 days to come up with a plan to reimburse mortgage and auto loan borrowers. If you think Wells Fargo could owe money, theoretically you should not have to do anything. Wells Fargo should notify you.
But it might help to let the CFPB know that you are among the people to whom Wells Fargo could owe money. You can submit a complaint here.
