Wells Fargo customers wronged by abuses that cost the bank $3.7 billion in fines are now getting details of how they’ll get their portion – $2 billion-plus – of the settlement with the Consumer Financial Protection Bureau (CFPB).
And that’s a lot of people, too. The CFPB estimates that one in three American households has at least one account with Wells Fargo.
If you’re someone with a Wells Fargo account, the bureau has put together a package of information to help you understand whether you may have been harmed, how payments will be distributed, and what else to expect.
Recently, the CFPB took action against Wells Fargo for breaking federal consumer protection laws that apply to financial products, including auto loans, mortgages, and bank accounts. Wells Fargo is required to pay more than $2 billion to customers who were harmed, plus a $1.7 billion fine that goes to the victims’ relief fund.
Auto loan customers: Some auto loan borrowers prepaid for GAP coverage, protection that covers you if your car is totaled while you’re upside-down on your loan. According to the CFPB, Wells Fargo acted unfairly by not refunding money when the loan terminated early—for example if it was paid off ahead of schedule.
There are two considerations that Wells Fargo auto loan holders need to know in order to qualify for this portion of the settlement:
1) Some customers’ auto loan payments were not applied correctly to their balances, leading to higher interest charges, late fees, and wrongful repossessions.
2) Some auto repossessions were also mismanaged, including how the vehicles were sold after repossession.
Mortgage loan borrowers: “Some mortgage loan borrowers were unfairly turned down when they requested modifications to their loan to avoid foreclosure. They also may have been charged incorrect fees and other costs,” the Bureau explained.
“Wells Fargo wrongly reported some customers as deceased, overstated attorney fees that meant applications were denied instead of approved and brought thousands of wrongful foreclosure actions.”
Bank account holders: When it comes to bank account customers in general, the focus is on costumers who were, in the Bureau’s eyes, caught off guard by unfairly charged overdraft fees on debit purchases and ATM withdrawals – even if they had enough money in their account at the time of the transaction.
“Some customers were charged monthly fees when they shouldn’t have been,” the bureau said, adding that the bank made a serious error when it advertised “no fees” if a customer made “10 or more debit card purchases and/or payments” in a month. That looked nice on paper, but instead the bank limited the types of eligible payments and didn’t count debit transactions that were posted days later.
Adding even more misery, the bureau said that some customers’ money was unfairly “frozen” for weeks if Wells Fargo suspected a single deposit was fraudulent.
Where’s your money?
If you consider yourself someone who was harmed by Wells Fargo’s actions between 2011 and 2022, your payment depends on how you were wronged. For automobile repossessions, you could be reimbursed at least $4,000. Wells Fargo will also pay $77.2 million to approximately 3,200 customers who had issues working with the company to modify their loan payments to avoid foreclosure.
Luckily, the CFPB says that consumers in the settlement don’t have to do much at all to get their money. Wells Fargo is required to have a plan for each of the violations in the order, and the CFPB says it’s supervising those repayments to customers and for anyone eligible to receive money, the bank is required to notify them. And, those payments are already going out, too, the Bureau said.