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People who owed some of the $2 billion Wells Fargo agreed to pay to customers affected by some of its banking practices may soon receive those funds.
The country’s fourth-largest bank reached a settlement with the Consumer Financial Protection Bureau, announced Tuesday, to resolve customer abuse related to auto loans, deposit accounts and mortgage loans, which have affected about 16 million accounts.
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Wells Fargo also agreed to pay a $1.7 billion civil penalty — the largest ever imposed by the CFPB.
“We have already communicated with many of the customers who may have been affected by the matters addressed in the settlement, and those efforts are ongoing,” a Wells Fargo spokesman told CNBC.
In other words, if you’re one of the affected customers, you may have already received your share of the $2 billion, or Wells Fargo will notify you automatically. You don’t have to do anything, the bank said.
The CFPB said the bank’s customers were illegally assessed fees and interest on auto and mortgage loans, wrongfully repossessed their cars, and misapplied auto and mortgage loan payments. In addition, Wells Fargo has been charging consumers unlawful overdraft fees and other spurious charges on checking and savings accounts and unlawfully freezing some accounts, the CFPB said.
$1.3 billion has already been reached across 11 million accounts
More than 11 million customer accounts have received more than $1.3 billion in auto loan related transactions. Another 5 million customers with deposit accounts will get a $500 million clean-up, including $205 million related to surprise overdraft fees, and thousands of customers with mortgages will get a share of at least $195 million, a CFPB said -Speaker.
The amount each aggrieved consumer receives (or has already received) depends on the specifics. For customers whose vehicles were improperly repossessed, the redress is $4,000 but could be more. For improperly suspended deposit accounts, the settlement provides for $150 for each affected customer.
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“As we have previously stated, we and our regulators have identified a number of unacceptable practices that we have systematically worked to change and are providing customers with remediation where warranted,” Wells Fargo CEO Charlie Scharf said in the company’s press release company about the comparison .
“This far-reaching agreement is an important milestone in our work to transform Wells Fargo’s operating practices and put these issues behind us,” said Scharf.