Consumer Financial Protection Bureau Orders Wells Fargo Bank To Pay Billions To Customers Whose Loans It Mismanaged

Almost everyone who can afford to own a house or a car has a home mortgage or a car loan.  Most of us don’t read the fine print when we sign to take out these loans.  It would seem that the lenders also do not always read the fine print, at least given the way that they selectively abide by the terms of the loans they issue.  For years, consumers filed complaints with the Consumer Financial Protection Bureau (CFPB) about incidents where Wells Fargo Bank, one of the largest banks in the United States, mismanaged consumer loans it issued.  Some of the complaints related to the lender overcharging consumers on interest and fees, and in other cases, the bank withheld debt reduction measures to which the borrowers were entitled.  In December 2022, the CFPB ordered Wells Fargo to pay $2 billion in redress to consumers it directly harmed financially, plus $1.7 in civil penalties.  The CFPB deposited the latter amount into the Civil Penalty Fund, where it will be paid to other consumers who suffered financial losses because of the wrongdoing of lenders.  If you suffered financial losses because a lender mismanaged your loan, contact a Philadelphia debt collection abuse lawyer.

Banks Behaving Badly

In the course of its investigation into Wells Fargo’s mistreatment of consumers, and through the numerous complaints that led to the investigation, the CFPB discovered many kinds of misconduct regarding car loans, home mortgages, and other financial products.  These are some of the most egregious examples:

• The bank mismanaged 11 million car loans. This mismanagement involved improperly applying payments, so consumers did not get credit for bringing their payments current.  The lender also charged consumers more fees and interest than they owed.  This led to some vehicles being repossessed even when, if the bank had correctly given consumers credit for what they had paid, the loans were not in default.
• In some cases, Wells Fargo denied customers’ applications to modify their home mortgages, when these borrowers were eligible for the modifications they were requesting. Some of these instances led to mortgage foreclosures.
• The bank wrongfully froze the accounts of more than one million consumers. Most of these freezes were because of transactions the bank suspected were fraudulent.  The CFPB stated that the appropriate action to take would be to allow the consumers to access the rest of the funds in their accounts while placing a hold on the suspicious transaction amount while the investigation was pending.

If you think that a lender is charging you more than you owe or failing to give you credit for the amounts you have paid, you should speak up.

Contact Louis S. Schwartz About Mismanagement of Loans by Lenders

A Philadelphia consumer law attorney can help you if you suffered financial losses because a lender did not properly give you credit for paying down your debt.  Contact Louis S. Schwartz at CONSUMERLAWPA.com to set up a free, confidential consultation.

Source:

consumerfinance.gov/about-us/newsroom/cfpb-orders-wells-fargo-to-pay-37-billion-for-widespread-mismanagement-of-auto-loans-mortgages-and-deposit-accounts/