Wells Fargo Class Action Lawsuit Auto Loans: Customers to Receive Compensation

Wells Fargo customers who took out auto loans between 2015 and 2019 may be eligible for compensation.

The Wells Fargo class action lawsuit auto loans case involves allegations of unfair business practices and deceptive lending practices.

A proposed settlement was reached in 2020, which could provide relief to affected customers.

Under the proposed settlement, Wells Fargo would pay $3.7 million to resolve claims related to the lawsuit.

Wells Fargo, the nation's third-largest bank, has been in hot water with the Consumer Financial Protection Bureau (CFPB) for various reasons. The bank's fake accounts scandal in 2016 was just the beginning of its troubles with the CFPB.

Wells Fargo's CEO, Charles Scharf, has been trying to put the bank's regulatory woes in the rearview mirror. The bank reported $2 billion in operating losses in the third quarter due to "litigation, customer remediation, and regulatory matters primarily related to a variety of historical matters."

The CFPB's current action against Wells Fargo could affect even those who don't bank with the company. When a bank of this size is penalized, it has ripple effects throughout the consumer finance industry.

The current settlement between Wells Fargo and the CFPB is a far cry from what was initially expected. The CFPB announced that Wells Fargo would be required to pay over $2 billion in redress to consumers and a $1.7 billion civil penalty.

Wells Fargo committed several legal violations, including unlawfully repossessing vehicles, improperly denying mortgage modifications, illegally charging surprise overdraft fees, and unlawfully freezing consumer accounts.

Here are the specific legal violations committed by Wells Fargo, as per the CFPB's findings:

The CFPB's action against Wells Fargo is not the first time the bank has had to settle with federal regulators. In 2018, Wells Fargo paid $500 million to the CFPB for various abusive practices across its auto and mortgage lending divisions.

Wells Fargo agreed to pay a record-breaking fine of $1.7 billion to the CFPB in December 2022.

The bank will also have to pay $2 billion in consumer redress, making the total amount a staggering $3.7 billion.

Wells Fargo's fine is a result of its alleged mistreatment of customers across several product lines.

The CFPB found that Wells Fargo committed numerous legal violations, including improperly repossessing vehicles and denying mortgage modifications.

Here are some of the specific allegations against Wells Fargo:

This is not the first time Wells Fargo has faced regulatory action, with previous fines totaling $500 million in 2018 and $3 billion in 2020.

The bank's recent settlement with the CFPB marks a significant milestone in its efforts to transform its operating practices and put its regulatory woes behind it.

Over 11 million auto loan customers were impacted by Wells Fargo's fraudulent activity, resulting in higher interest charges, late fees, and wrongful repossessions. Some of these customers paid for GAP coverage, but the bank didn't refund money owed if the loan was paid off early.

Customers with Wells Fargo mortgages, auto financing, and deposit accounts were also affected, with over 16 million accounts impacted by the bank's wrongdoings. This includes wrongful foreclosures, repossessions of cars, and erroneous overdraft fees.

Thousands of mortgage customers were affected by Wells Fargo's errors, including incorrectly denied loan modifications and improperly charged fees. They are owed more than $195 million in remediation.

The scope of Wells Fargo's wrongdoing is staggering, with customers owed a total of $1.3 billion. This highlights the need for banks to prioritize their customers' needs and take responsibility for their actions.

If you had a car loan through Wells Fargo and your payments weren’t applied correctly, you may be entitled to money for damages.

More than 11 million customer accounts were affected, with customers owed over $1.3 billion in remediation.

Customers who bought guaranteed asset protection coverage, known as gap insurance, and paid off their car loans early may be entitled to gap fee refunds.

More than 5 million customers were affected, with customers owed over $500 million in remediation.

Here's a breakdown of the affected customer numbers and owed remediation amounts:

Wells Fargo has been in the news for all the wrong reasons, with a string of regulatory issues that have left customers and investors alike questioning the bank's practices.

In 2018, Wells Fargo paid $500 million to the Consumer Financial Protection Bureau (CFPB) for abusive practices across its auto and mortgage lending divisions. This was just the beginning of the bank's woes, as it went on to pay another $500 million to the Office of the Comptroller of the Currency as part of the same settlement.

The bank's problems didn't stop there. In 2020, Wells Fargo agreed to a $3 billion settlement with the U.S. Department of Justice after opening millions of accounts without its customers' permission. This was a major scandal that highlighted the bank's lack of oversight and accountability.

Wells Fargo's regulatory issues have had a significant impact on its finances, with the bank reporting $2 billion in operating losses in its third-quarter earnings due to "litigation, customer remediation, and regulatory matters." This is a 31% dip in quarterly net income year over year, with the bank's net income dropping from $5.1 billion in the third quarter of 2021 to $3.5 billion in the same period this year.

Here are some of the specific issues that have led to Wells Fargo's regulatory strife:

It's clear that Wells Fargo has a long way to go in terms of regaining the trust of its customers and regulatory bodies. With its history of abusive practices and lack of oversight, it's no wonder that the bank is facing significant financial and reputational consequences.