20K+ Wrongful Repossessions Just Cost Wells Fargo $300M

Wells Fargo has reached a $300 million settlement with shareholders who claim in a class action lawsuit that the bank forced unnecessary insurance policies on thousands of customers and concealed the practice from investors who lost money after the issue became public.

According to the lawsuit filed by the lead plaintiff, the Construction Laborers Pension Trust Fund of Southern California, Wells Fargo pressured hundreds of thousands of customers into buying Collateral Protection Insurance “and failed to refund unearned guaranteed auto protections premiums to tens of thousands of customers, causing more than 20,000 of its customers to have their cars repossessed.”.

According to the complaint, between the time the problems became known to the public and the time the bank acknowledged them, the price of the bank’s stock “traded at artificially inflated prices” as a result of Wells Fargo’s failure to disclose the issues.

The problems were revealed by Wells Fargo in July 2017, claiming to have known about them a year earlier. In their 2018 lawsuit, the plaintiffs claimed that former CEO Timothy Sloan had lied to them when he claimed he was “not aware of any issues” with the bank’s sales practices in November 2016.

Any wrongdoing by Wells Fargo has been refuted. According to a spokesperson, “We are pleased to have resolved this legacy issue, even though we disagree with the allegations in this case. “.

When it agreed to pay $386 million to resolve a class action lawsuit with borrowers of auto loans in 2019, the business continued to deny any wrongdoing.

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