HomeWorld NewsUS consumer watchdog orders Wells Fargo to pay $3.7 bn in repayments and fine: here’s why

US consumer watchdog orders Wells Fargo to pay $3.7 bn in repayments and fine: here’s why

  • December 21, 2022
  • Posted by: Bastion team
  • Category: World News
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The US consumer finance regulator has ordered consumer banking giant Wells Fargo to repay $2 billion to consumers and imposed a $1.7 billion penalty against the bank for unfair practices that included charging consumers illegal fees and interest on auto loans and mortgages, as well as incorrectly applying overdraft fees against savings and checking accounts, the AP reported.

This is the largest fine slapped on any bank ever by the Consumer Financial Protection Bureau (CFPB), a US government agency mandated to ensure consumers are treated fairly by banks, lenders, and other financial institutions, the report said.

What has Wells Fargo done?

In a statement, the CFPB said that the bank’s “illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes”.

According to the bureau, “consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank”.

Wells Fargo also charged consumers “unlawful surprise overdraft fees and applied other incorrect charges to checking and savings accounts”.

The illegal practices of Wells Fargo impacted more than 16 million customers, the CFPB said. Apart from the redress to these customers, Wells Fargo will pay a $1.7 billion fine, “which will go to the CFPB’s Civil Penalty Fund, where it will be used to provide relief to…

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