Wells Fargo Uncovers 450 More Illegal Vehicle Repossessions
The number of Wells Fargo illegal vehicle repossessions has more than doubled, according to settlement information from the Department of Justice. The bank found 450 more instances between January 2008 and July 2015 where military service members had their cars repossessed without a court order, bringing the total to 863.
Wells Fargo has agreed to pay $5.4 million for the additional vehicle seizures, with a total settlement of $10.2 million. The bank has agreed to repair the credit of any service member affected by this incident, along with $10,000 and compensation for equity lost on the vehicle.
Under the Servicemembers Civil Relief Act, a lender may not repossess a vehicle without a court order if the borrower made a deposit or at least one payment before entering military service. The Office of the Comptroller of Currency fined Wells Fargo an additional $20 million in a related case last September for not abiding by other provisions within the act (such as capping interest rates at 6% for service members).
In August of this year, the auto lending department for Wells Fargo faced yet another lawsuit about vehicle repossessions. The bank allegedly charged borrowers for insurance even when they had their own auto insurance, resulting in 25,000 repossessions and 250,000 delinquent payments.
Former Wells Fargo CEO John Stumpf stepped down in October 2016 after the bank’s fake account scandal came to light. Employees had created more than two million checking and credit card accounts in customers’ names without their permission. Since then, new CEO Tim Sloan has been dealing with the aftermath of the scandal and the steady stream of lawsuits that have followed.
In September, Sloan said the bank was focused on keeping costs down. He aimed to get the company’s efficiency rate below 60% by some time next year, but the new repossession reimbursements may delay those plans.