Class Action Lawsuit Has Been Filed Against Wells Fargo

Wells Fargo is one of the largest banks in the United States and it has a very extensive history and therefore a lot of mistakes and scandals have been made in the past. These scandals and mistakes have paved the way for Wells Fargo to receive billions of dollars in compensation from the government.

This is one of the largest class action lawsuits in the history of the world. It was settled in December of last year and is expected to be decided in the next few weeks. A whopping $ 66.7 million dollar settlement was hashed out by the government on behalf of the borrowers and many other consumers who were cheated by the lenders of the bank.

Wells Fargo 401k Class Action Lawsuit

The lawsuit was filed by various Wells Fargo employees and it involves various schemes like the Wells Fargo Proposed Rate Cut, Reduction in Average Closing Cost, Elimination of Annual Service fee, etc.

According to the complaint, the company advertised reduction in interest rates and also provided an opportunity to save up to two thousand five hundred dollars every year.

However, when the borrowers actually tried to fulfill these offers, they were disappointed to find out that they were not able to access these benefits. Thus, they filed the class action lawsuit against the bank.

The class action settlement was filed by the U.S. District Judge Michael J. O’Brien in New York. Earlier, the fraudulent act had occurred in 2021, but the federal judge had imposed strict limitations to the case and only six class action settlement claims could be claimed per customer per year.

According to the complaint filed by the plaintiffs, the bank management allowed illegal practices to go on, which eventually led to billions of dollars lost to the customers.

There are various reasons blamed for the illegal activities of the Wells Fargo and they include such examples as allowing fake bank accounts, altering loan rates, not informing customers about rate changes, giving incorrect approval to loans and changing opening and closing dates.

After a thorough investigation, the federal judge has ordered major alterations to the policies and procedures followed by the bank.

He has also slapped charges on the Wells Fargo with $75 million, of which the amount is expected to be recovered within three years. The class action settlement claims will allow the customers to get their money back and claim compensations from the fraudulent activity of the bank management. The charges of the fraudulent activities will be recovered through refunds, interest, penalties and legal costs.

There are two types of class members in this lawsuit; namely, lump sum cash payouts or base settlement payouts and crediting and debit settlement payouts.

For both the class members, the bank will be forced to enter into settlement agreements. The first type of settlement agreement is the refunding settlement wherein the Wells Fargo will pay the customers who have submitted claims for the reduced interest rate or penalties.

The second type of settlement agreement is the crediting and debit settlement whereby the Wells Fargo will reimburse the customers for the debit portion of their account balance, in other words, they will be reimbursed minus the interest or fees. For the above stated reasons, the class members of the Wells Fargo 401k action lawsuit are entitled to both types of settlements.

On April 4, the class action lawsuit has been filed against the bank under the name of Barber v. Wells Fargo Bank.

In this suit, the court has allowed the group of plaintiffs to sue for damages against the bank based on negligence. According to the complaint, the bank was negligent in allowing its employees to open or maintain fake accounts for the purpose of extracting benefits, charging them with high service charges and not refunding the interests.

At present, the case has been filed against the thirty-one bank employees. Apart from that, the court has allowed the group of plaintiffs to claim compensation for the injuries suffered by them as a result of being forced to open or maintain false accounts.