Millions of Wells Fargo customers with who held bank accounts, or auto loan or mortgage loan accounts with the bank from 2011-2022 may be entitled to a part of a $3.7 billion settlement after the Consumer Financial Protection Bureau found the bank subjected certain accounts to "illegal practices" in the form of misapplied auto loan payments, wrongful foreclosures, unwarranted overdraft fees and more.
According to a Jan. 17, 2023 blog post from the watchdog agency, a settlement with Wells Fargo was reached after the bureau found that more than 16 million customer accounts had been harmed. The total settlement amount, the post states, is $3.7 billion -- including a $1.7 billion fine that specifically goes into a victims' relief fund.
One in three American households is a Wells Fargo customer and is affected by its business practices and "corporate culture," the CFPB says. Here's a breakdown of how the bureau says accounts were harmed, how much customers could see from the settlement and more.
Customers With These Types Of Accounts Are Impacted
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According to the CFPB, customers that held one of the following accounts between 2011 and 2022 were harmed. Here's a breakdown of how the bureau says each account was impacted, and how.
Wells Fargo Auto Loan Customers
- Auto loan payments were not correctly applied to balances on some accounts, leading to late fees, wrongful and mismanaged repossessions and higher interest rates
- Wells Fargo didn't properly refund money if a loan was terminated early from borrowers who prepaid for GAP coverage
Wells Fargo Mortgage Loan Borrowers
- Some borrowers were unfairly turned down when requesting loan modifications in hopes of avoiding foreclosures
- Some borrowers were incorrectly charged fees or other costs
- Wells Fargo wrongly reported some customers deceased, brought "thousands of wrongful foreclosure actions," overstated attorney fees leading to incorrectly denied applications
Wells Fargo Bank Account Holders
- Customers in some cases were charged surprise overdraft fees on debit purchases and ATM withdrawals, even if they had enough money in their account at the time
- Some customers were incorrectly and wrongfully charged monthly fees
- Some customers’ money was unfairly “frozen” for weeks if Wells Fargo suspected a deposit was fraudulent
How Do I Know If I am Owed Money?
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The CFPB states Wells Fargo is required to notify those who are eligible to receive money, and that customers are not required to take any action in order to receive payment. The bureau also states that it will be "supervising" the bank's repayment to customers."
"If you believe you are eligible for a payment and have not received it yet, you should first contact Wells Fargo at 844-484-5089, Monday through Friday from 9:00 a.m. to 6:00 p.m. ET," the post states.
If calling Wells Fargo does not resolve the issue, customers can contact the bureau by submitting a complaint online.
How Much Could I Get?
According to the CFPB, the "payment amount varies." Additionally, the settlement states that the bank is required to "have a plan for each of the violations in the order."
Those who had a vehicle repossessed could be reimbursed at least $4,000, the bureau says. The settlement also states that Wells Fargo is required to pay $77.2 million to approximately 3,200 customers who "had issues working with the company to modify their loan payments to avoid foreclosure."
According to a report from CNBC, damages for customers with Wells Fargo bank accounts average around $100 per claim, and mortgage holders who were unable to modify their mortgages to avoid foreclosure are seeing an average of $24,215 per claim.
When Are Payments Being Distributed?
Some customers have already received their payments, the CFPB says.
"We have already proactively communicated with most of the customers who may have been impacted by the matters covered in the settlement, and those efforts are ongoing," a Wells Fargo spokesperson told CNBC Make It.
