One of America’s largest banks isn’t admitting that they did anything wrong but they’re forking over $386 million to settle a lawsuit against them.
The money will go to the 600,000 customers who alleged that Wells Fargo improperly charged them for “collateral protection insurance” over nearly an 11-year span beginning in 2005.
Wells Fargo’s misdeeds “caused nearly 275,000 customers to become delinquent and nearly 25,000 vehicles to be illegally repossessed,” the legal complaint claims.
The giant bank seems to have been selling people car insurance that “they did not want or need when they took out car loans,” Reuters informs.
The class action case was pending in California’s Santa Ana U.S. District Court and the proposed settlement awaits final approval of the judge in the case, Andrew J. Guilford.
The bank’s insurer, National General Insurance Company, will kick in another $7.5 million which brings the total available to reimburse customers $393.5 million.
On top of that, Wells Fargo will pay another $36.5 million for the plaintiff’s legal fees.
Wells Fargo issued an emailed statement calling the arrangement, “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.”
Last year, the iconic institution agreed to another $1 billion settlement split by the Consumer Financial Protection Bureau and the Comptroller of the Currency. That was to put “U.S. probes of the San Francisco-based bank’s auto insurance and mortgage practices” behind them.
Wells Fargo isn’t allowed to expand their operations until Federal Reserve restrictions are removed, which won’t happen until they reform their “culture and oversight.”