Wells Fargo Coughs Up $5M+ More Over SCRA Violations
Wells Fargo has agreed to a second round of payments to more than 400 members of the military whose personal vehicles the banking giant repossessed while they were on active duty.
Each service member victimized by the bank will receive $12,300 from a $5 million-plus settlement fund Wells Fargo has agreed to set up. The settlement resolves a federal class action lawsuit filed in Topeka in 2017 by Jin Nakamura, a soldier stationed at Fort Riley, Kansas.
In agreeing to resolve the case, Wells Fargo denied the allegations and said in a statement that it settled “to avoid the distraction of burdensome and protracted litigation.”
Julie Fogerson, a spokeswoman for Wells Fargo, said the agreement “is a step forward in making things right for customers and we remain deeply focused on caring for our neighbors, family members and team members who serve our country.”
An attorney for Nakamura did not respond to a request for comment.
Wells Fargo had previously agreed to pay the same individuals $10,000 each. Those payments came under an order by the U.S. Department of Justice and federal banking regulators to which Wells Fargo consented in 2016.
Wells Fargo, the country’s fourth largest bank, has been stained by a series of consumer scandals. The bank has agreed to more than $2 billion in settlements and government orders stemming from various complaints, including claims it opened millions of unauthorized accounts, added customers to its online banking service without their knowledge, required customers to buy unneeded car insurance and charged them excessive fees to lock in mortgage loan rates.
In the Nakamura case, Wells Fargo repossessed his car even though Nakamura had set up automatic payments for the vehicle, according to his lawsuit. By the time he figured out what was happening, the car had been sold along with some military gear he’d stowed in the vehicle.
As the lead plaintiff, Nakamura will receive a bigger payment than the other members of the class. The case required him to make two trips from his duty station in South Korea.
Court documents make it clear that payments under the settlement will be in addition to money service members were eligible to receive under the earlier government case.
In that action, the Justice Department claimed that Wells Fargo had illegally repossessed active service members’ vehicles even though they were protected under the Servicemembers Civil Relief Act of 2003. The act requires lenders to get a court order before repossessing an active service member’s vehicle.
Federal investigators had responded to a North Carolina man’s complaint after Wells Fargo repossessed his used car just as he was deploying to Afghanistan in 2015. Investigators were able to corroborate the Army National Guardsman’s complaint and found “a pattern of unlawful repossessions spanning over more than seven years,” according to a Department of Justice statement.