Wells Fargo customers may soon receive compensation as part of a $185 million settlement approved by a court, resolving a class action lawsuit related to mortgage forbearance practices during the COVID-19 pandemic.
The lawsuit, filed last year, alleged that Wells Fargo placed certain customers into mortgage forbearance programs without their explicit consent, leading to financial hardship and negative impacts on their credit scores. Plaintiffs argued that the bank initiated forbearances for clients who had merely inquired about financial difficulties or expressed concerns, rather than formally requesting such measures.
While Wells Fargo has not admitted to any wrongdoing, the bank has agreed to the $185 million settlement to address the claims. According to reports, customers who had their mortgages placed into COVID-19 forbearance without informed consent between March 1, 2020, and December 31, 2021, are eligible for compensation. Some affected customers have already received notification letters from the bank.
In a statement to MARKETPLACE.ORG, a Wells Fargo spokesperson said, “During the early stages of the pandemic, Wells Fargo worked hard to help customers who expressed concern about financial hardship and their ability to make their next mortgage payments… We support this settlement because we believe it is in the best interests of our customers.”
The settlement marks a significant resolution to the dispute, offering financial relief to thousands of customers impacted by the bank’s pandemic-era practices.
Sources: Wells Fargo Settlement Website, Top Class Actions, Marketplace.org