Wells Fargo agrees to pay $ 385 million to settle the dispute of a car loan

SANTA ANA, Calif. (AP) – Wells Fargo has agreed to pay at least $ 385 million to settle a lawsuit in California, alleging that it has subscribed thousands of borrowing customers for expensive auto insurance without their consent .

The bank filed the deal Thursday in federal court in Santa Ana. He still needs the approval of a judge.

Another defendant, National General Insurance, agreed to pay $ 7.5 million, the New York Post reported.

Wells Fargo, based in San Francisco, confirmed the deal on Friday and described it as "a milestone in problem solving". The bank statement states that she will send checks to the relevant customers.

The 2017 class action alleged that for more than a decade, Wells Fargo had opted for auto insurance for customers, which they did not need because they had private insurance.

Some 25,000 car owners could not afford the extra costs and repossessed their vehicles, according to the lawsuit.

The bank acknowledged in 2017 that $ 80 million worth of unnecessary insurance costs had been added to 800,000 auto loans.

This is part of a series of scandals involving the banking giant, which began in 2016 with the discovery of millions of fake chequing accounts that its employees have opened to meet their sales quotas.

This led to the resignation of CEO John Stumpf. Last year, the US Federal Reserve limited the asset size of Wells Fargo. Tim Sloan, who replaced Stumpf, resigned in March. New irregularities appeared on his watch, including auto loan issues.

Federal regulators who have lost patience with Wells Fargo's persistent bad behavior have inflicted severe punishments. Wells was fined $ 1 billion last year at the Office of Consumer Financial Protection and the Office of the Comptroller of the Currency. But more importantly, the Federal Reserve intervened and handcuffed Wells' ability to expand its business until the bank could prove that it had put its affairs in order.

Despite the restrictions, Wells Fargo announced in March that it had gained $ 5.86 billion and that its profits had increased by 14% over the previous year, thanks to rising interest rates.

The Wells Fargo stock closed down 29 cents Friday at $ 45.63 per share.