Wells Fargo illegally repossessed 413 cars that belonged to U.S. military servicemen and -women, and will pay $4.1 million in settlements, CNN Money is reporting.
Between 2008 and 2015, the bank repossessed the vehicles without a court order, which is a violation of federal law. Specifically, the repossession tactics violate the Servicemembers Civil Relief Act, which requires a court order to repossess a vehicle if the owner took out a loan and made a payment before beginning their military service.
The bank would then auction off the vehicles, and attempt to collect the difference. One Army National Guardsman in North Carolina said Wells Fargo repossessed his car while he was preparing for a deployment to Afghanistan, then tried to collect $10,000 in remaining balance.
Dennis Singleton says he was preparing to deploy to Afghanistan in 2013, when Wells Fargo repossessed his 2011 Ford Escape. Even as he was on the ground overseas, the bank attempted to collect on the balance he owed on his vehicle, even though it had been illegally repossessed.
In a settlement approved by the Justice Department, Wells Fargo will pay $10,000 to each service-member whose vehicle was repossessed, plus the lost equity in their vehicles, plus interest. Additionally, the bank will repair the damage done to the victims’ credit reports.
The bank must also pay a $60,000 civil fine, and must try to locate any other service personnel whose vehicles were repossessed, besides the 413 already identified.
As The L.A. Times reports, the $4.1 being paid to soldiers, sailors, airmen and marines is a part of a larger set of fines and restitution ordered by the Justice Department for years of illegally mistreating service personnel. The bank will pay an additional $20 million to settle allegations of denying military personnel certain federally-guaranteed banking protections, such as capping interest rates at six percent. Those allegations date back as far as 2006.
In a statement, U.S. Atty. Eileen M. Decker, of the Central District of California, noted that Wells Fargo failed to do right by our military.
“We all have an obligation to ensure that the women and men who serve our country in the armed forces are afforded all of the rights they are due. Wells Fargo failed in that obligation.”
Meanwhile, the bank said, in a statement, that they fully intend to comply with the Justice Department’s order and move swiftly to make things right.
“We have been notifying and fully compensating customers and will complete this work in 60 days.”
In early September, news broke that Wells Fargo had illegally created thousands of fake bank and credit card accounts, without customers’ knowledge, then charging them overdraft and late fees, according to Forbes. Ever since the fake-account scandal broke, Wells Fargo has been the target of an ever-growing list of damning allegations of criminal and unethical behavior.
At least 5,000 employees have already been fired for their roles in the fake-account scandal, but the damage appears to be just beginning.
Last week, Wells Fargo CEO John Stumpf was called before the Senate to give some answers. It did not go well for him, according to CNN Money.
— The Daily Beast (@thedailybeast) September 28, 2016
Elizabeth Warren let loose with a blistering verbal diatribe against the CEO, calling him “gutless” and demanding that he resign.
“You should resign…You should be criminally investigated.”
Stumpf, for his part, resisted calls to step down.
“I recognize we could have done more earlier. I try to lead with courage and conviction, but of course we make mistakes.”
[Feature Image by blurAZ/Shutterstock]