Wells Fargo, a prominent US banking institution, has reached a $1 billion settlement in a class-action lawsuit related to illicit practices that regulators assert caused significant harm to the American public.
The settlement arises from a series of fraudulent activities systematically carried out by Wells Fargo against its customers, as stated by the Consumer Financial Protection Bureau (CFPB).
In December, Wells Fargo had already agreed to pay the CFPB an unprecedented fine of $3.7 billion for freezing customer accounts unlawfully, imposing unauthorized fees, opening customer accounts without consent, and improperly seizing vehicles.
The recent $1 billion class-action settlement will be disbursed to investors who purchased Wells Fargo stock between February 2018 and March 2020.
This new agreement was reached with the assistance of a mediator, and according to Courthouse News, Wells Fargo has made no admission of wrongdoing, stating in a released statement, “While we dispute the allegations in this case, we are pleased to have resolved this matter.”
According to the CFPB, Wells Fargo’s actions adversely affected millions of American families, resulting in billions of dollars in financial harm.
“The bank’s unlawful conduct inflicted significant financial damage on its customers and led to the loss of homes and vehicles for thousands of customers. Consumers faced illegal fees and interest charges on auto and mortgage loans, wrongful repossession of their cars, and misapplication of payments to auto and mortgage loans by the bank. Additionally, Wells Fargo imposed unauthorized overdraft fees and applied incorrect charges to checking and savings accounts.”
The agency reports that the illicit practices impacted over 16 million consumer accounts in total, and the fines collected were partly used to reimburse billions of dollars to affected individuals nationwide.
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