Wells Fargo Fined Almost $4 Billion For Consumer Law Violations
In December, Wells Fargo Bank was ordered to pay customers over $3.7 billion due to consumer law violations; specifically for charging illegal fees and interest on auto loans and mortgages and incorrect overdraft fees on checking and savings accounts. The assessment represents the largest fine ever against a bank.
Still, according to regulators, in terms of reforming its practices, the bank still has a long road to travel, especially when it comes to complying with consumer protection regulations. These actions have impacted a reported 16 million consumers; not only in terms of extra fees, but also in some cases in the form of illegally foreclosing on homes and repossessing vehicles. The bank also reportedly wrongfully denied thousands of mortgage loan modifications. The fine assessed against it will go into a civil penalty fund that will provide relief to victims of consumer financial law violations.
In this particular case, during at least a seven-year period, the bank improperly denying thousands of mortgage loan modifications led to a number of consumers losing their homes to wrongful foreclosures. The bank was aware of the issue for years before it ultimately took action to stop.
Fees & Freezing Accounts
The bank giant also reportedly charged overdraft fees even though customers had enough money in their accounts at the time of the relevant transaction and illegally froze consumer accounts based on faulty automated filters that reported potential fraudulent deposits. Even in cases where a fraudulent deposit was suspected, banks like Wells Fargo have the option to take other, less severe actions that do not have the same harmful effects on consumers.
The $2 billion fine will be broken down based on the following:
- ~$1.3 billion to redress those affected by the bank’s auto lending practices;
- ~$500 million in association with those affected by deposit accounts, including illegal surprise overdraft fees;
- ~$200 million for those affected by mortgage servicing accounts.
A History of Violations
Wells Fargo has been repeatedly cited for violating consumer laws, going back as far as 2016, when the company was found to be creating fake accounts on behalf of customers in order to charge extra fees. Most of its latest violations are in the areas of auto in mortgage loan lending practices. The bank giant was also fined $1 billion back in 2018 for the same type of violations.
Columbus, Ohio Consumer Protection Attorneys
If you or a loved one suspects that they have been the victim of consumer protection violations, it is critical that you speak with a consumer protection attorney right away before severe damage can be done, such as losing your home. Contact our Columbus consumer law attorneys at the Kohl & Cook Law Firm LLC today to find out how we can help.