Wells Fargo To Hand Out $1,300,000 Over Lawsuit Alleging Bank Sent Improper Letters to Customers
Banking giant Wells Fargo is set to distribute $1.3 million in a new class action settlement.
The lawsuit alleges the bank sent improper and misleading correspondence to mortgage customers in West Virginia who were enrolled in its COVID-19 forbearance program.
Plaintiff David Kirkpatrick claims Wells Fargo sent letters to borrowers that improperly addressed how deferred mortgage payments would be handled at the end of the forbearance period.
The letters allegedly suggested that missed payments would automatically be moved to the end of the loan term, a representation the plaintiff argues was inaccurate or misleading under applicable mortgage rules and consumer protection laws.
The lawsuit contends that the communications were sent to numerous similarly situated borrowers in the state who had opted into pandemic-related forbearance programs offered by the bank.
The forbearance programs were designed to provide temporary relief to homeowners experiencing financial hardship during the COVID-19 emergency, but the suit alleges that the follow-up letters created confusion about borrowers’ repayment obligations and loan modification options.
Without admitting any wrongdoing, Wells Fargo has agreed to establish a settlement fund totaling $1.3 million. The fund will be used to provide payments to eligible class members who received the challenged letters during the relevant time period. The settlement also resolves all claims asserted in the action related to the allegedly improper communications.
Class members who qualify under the settlement terms may be entitled to receive a portion of the fund without needing to file a claim, depending on the final approval and distribution process. The agreement brings the litigation to a close while avoiding further court proceedings.
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