Wells Fargo & Co conceded to the class-action allegations of signing up customers for an auto insurance against their will. It is alleged that the customers were signed up for the insurance policy as they were taking their car loans. Wells Fargo will now pay up to $386 million as compensation.
The deal was revealed through a Santa Ana U.S. District Court filing on Thursday but it still needs approval from a judge.
The Thursday filling revealed that the National General Insurance company will have to pay extra $7.5 million in addition to the Wells Fargo’s $386 million, that totals to $393.5 million the amount payable to the complainants.
Wells Fargo has since denied committing the crime but it has agreed to pay off so as to be safe from the distraction of litigation and other risks that may arise from such claims. The accused will also be responsible for the customers’ legal cost and will have to pay $36.5 million for the same.
Wells Fargo has through an email described the settlement as an “important step in making things right for customers.”
A Wells Fargo spokesperson, in addition, noted that the company will still make follow upon customers that had outlined the required redress and send them personalized letters.
The complainant’s lawyers declined to comment on the matter.
Wells Fargo has been followed by a series of claims since September 2016 and this settlement is a way to try to remedy its almost shuttered image and trust. It was then accused of abusing customers by forcing them to buy products against their will and thereafter unauthorized fee deductions from their accounts.
It agreed to pay the Consumer Financial Protection Bureau and also the Office of the Comptroller of the Currency $1 billion to settle investigations that were ongoing concerning its San Francisco based bank malpractices relating to mortgage and auto insurance.
In 2018, the Federal Reserve put the nation’s fourth-largest bank by assets under strict restrictions that it clears its mess and that has to a great extent hindered the bank’s growth.