Photo: Bloomberg Photo by Daniel Tepper.
SANTA ANA, CA. Customers for expensive motor insurance without their consent, which led many to withdraw their vehicles.
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 the right direction" to get things right. "The bank has announced that checks will be sent to affected customers.
The 2017 class action lawsuit alleged that Wells Fargo had taken out auto insurance loans for customers for over a decade, which they did not need because they had them private insurance.
Approximately 25,000 car owners were unable to pay the additional fees and had their vehicles taken back, it was claimed.
The bank admitted in 2017 that $ 800 million in car loans had resulted in unnecessary insurance costs of $ 80 million
This is one of several scandals involving the bank giant, which revealed millions of counterfeit current accounts opened by its employees in 2016 to meet sales quotas.
This led to the resignation of CEO John Stumpf Year, the Federal Reserve has limited the size of Wells Fargo's assets, and Stumpf's successor Tim Sloan resigned in March. New shortcomings had surfaced on his watch, including problems with car loans.
Federal authorities, which had lost patience with Wells Fargo's persistent misconduct, 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 restrictions, Wells Fargo reported in March that it had earned $ 5.86 billion and more. Profits rose 14% year-over-year, helped by higher interest rates.
The Wells Fargo share closed on Friday at 29 cents at $ 45.63 per share.