It looks as though Wells Fargo Inc. is finally going to put their auto-insurance scandal behind them. It looks as though a settlement has finally been reached, though the terms still need to be approved by a judge before it’s completely official.
According to the settlement filing Wells Fargo has agreed to pay at least $385 million to customers who claim they were enrolled in a Wells Fargo auto-insurance program without their knowledge or consent when they took out a car loan with the company. The filing also makes clear that National General, an auto insurance underwriter that was involved with the scandal will have to pay an additional $7.5 million themselves.
For those who don’t remember, in 2017 Wells Fargo bilked millions of dollars from thousands of customers by signing them up for car insurance when they got a car loan through the company. Since those customers had no idea that they were signing up for insurance, almost 250,000 of them went into delinquency. That in turn led to more 25,000 vehicles getting repossessed.
Wells Fargo is eager to put this case behind it as they are still working to recover from a series of scandals that started plaguing the company in early 2016. In early 2019 Wells Fargo claimed that they are expecting spend up to $2.7 billion in legal fees in an effort to move on from these scandals. Officially settling this auto-insurance scandal will be a big step in that direction.
Of course, it’s entirely possible that that number will only continue to rise. The $2.7 billion number is $500 million more than the company claimed they would need to pay out only three months earlier.
Wells Fargo seems determined to move on from that scandal, but just how much it will cost them to do so remains to be seen.