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Home / Business / Wells Fargo agrees to pay $ 385 million to settle the car loan lawsuit

Wells Fargo agrees to pay $ 385 million to settle the car loan lawsuit



Wells Fargo has agreed to pay at least $ 385 million to settle a California lawsuit alleging that thousands of car buyers have completed expensive car insurance without their consent.

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The bank filed the agreement on Thursday in federal court in Santa Ana. It still requires the approval of a judge.

Another defendant, National General Insurance, agreed to pay $ 7.5 million, the New York Post reported.

Wells Fargo of San Francisco confirmed the agreement on Friday, calling it "an important step in getting things right". The bank announced that checks will be sent to affected customers.

The 201

7 class action lawsuit alleged that Wells Fargo has been providing auto insurance loans for customers for more than a decade that they did not need because they had private insurance.

About 25,000 car owners were unable to pay the additional fees and had their vehicles taken back, as claimed.

The bank admitted in 2017 that $ 800,000 in car loans had been raised.

This is one of several scandals involving the bank giant. From 2016, millions of counterfeit checking accounts were opened, which opened its staff to meet the sales quotas.

This led to the resignation of CEO John Stumpf. Last year, the Federal Reserve capped the size of Wells Fargo's fortune, and Stumpf's successor Tim Sloan resigned in March. New inadequacies had come to light on his watch, including the problems with car loans.

The federal authorities, which had lost patience with Wells Fargo's persistent bad behavior, imposed harsh sentences. Wells had to pay a $ 1 billion fine last year to the Consumer Financial Protection Bureau and the Comptroller of the Currency office. More importantly, however, the US Federal Reserve intervened and handcuffed Wells to expand their business until the bank could prove it had put their house in order.

Despite the restrictions, Wells Fargo reported in March that it had earned $ 5.86 billion and more. Profits rose 14% yoy, helped by higher interest rates.

Wells Fargo shares closed on Friday at 29 cents at $ 45.63 per share.


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