Wells Fargo Will Pay $386M to Settle Auto Insurance Lawsuit
Wells Fargo has been on the wrong end of a class-action lawsuit. Customers claim that the bank signed them up for auto insurance they did not want or need when they took out car loans. Now Wells Fargo has agreed to pay them at least $386 million to settle.
The underwriter, National General Insurance, will pay an additional $7.5 million. That makes the total customer payout at least $393.5 million.
Wells Fargo has denied wrongdoing but said it settled to avoid the risks, cost and distraction of litigation. The bank will also pay up to $36.5 million for the customers’ legal costs, Reuters reports.
This settlement covers Wells Fargo customers who were charged for “collateral protection insurance” between Oct. 15, 2005 and Sept. 30, 2016. These actions had real consequences for many people. Per the complaint, these wrongful practices caused nearly 275,000 customers to become delinquent and 25,000 vehicles to be illegally repossessed.
The case is In re Wells Fargo Collateral Protection Insurance Litigation, U.S. District Court, Central District of California, No. 17-ml-02797.