The revelation that Wells Fargo had phonied up checking and credit card accounts for customers, in a bid to inflate sales numbers, was bad enough. It cost the bank $185 million in state and federal fines, but that hasn't been the end of it.
The bank is now facing lawsuits because of the scandal, which prompted CEO John Stumpf to retire. And one of the bank's biggest critics in Washington, Sen. Elizabeth Warren (D-MA), has pressed for additional changes in the executive suite.
Now comes word that Wells Fargo has agreed to settle a lawsuit brought by plaintiffs who charge the bank financially exploited consumers who were losing their homes in the aftermath of the financial crisis.
$50 million settlement
Reuters reports that Wells Fargo has agreed to pay $50 million to settle a suit that charged the bank made an excessive profit on third party appraisals of homes that defaulting homeowners were required to pay.
Most mortgage agreements contain language allowing a lender to charge the homeowner for the cost of an appraisal if he or she defaults. The appraisal tells the lender what the property is now worth.
The suit claimed Wells Fargo significantly marked up the cost of the appraisals, sometimes charging the consumer more than double what the bank paid. Reuters quotes a spokesman for the bank as saying it did nothing improper but agreed to the settlement to put the matter to rest.
Playing Whack A Mole
But Wells Fargo might feel like it's playing Whack A Mole at this point, as another lawsuit pops up as one is settled. A law firm is now trying to find consumers for a proposed class action settlement with the bank for alleged robocalls.
Greenwald Davidson Radbil PLLC issued a press release last month seeking consumers who had received texts or calls on cell phones from the bank without permission. The lawsuit claimed Wells Fargo used an automatic telephone dialing system to make or initiate calls in connection with overdrafts of deposit accounts. Wells Fargo said it did not break the law and did nothing wrong.
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