Wells Fargo settles auto insurance suit for $432M

Wells Fargo & Co. and National General Insurance Co. have agreed to pay $432 million to resolve claims the companies engaged in an unlawful insurance scheme — an increase compared with a June 6 court filing that proposed a $393.5 million settlement. 

In the proposed class-action settlement, Wells Fargo agreed to pay $386 million, with National General paying $7.5 million. However, the new development may change the amount Wells Fargo and National General will pay individually. 

According to the class action, both companies engaged in an “unlawful scheme to force millions of Wells Fargo auto loan customers to pay for unnecessary and unwanted Collateral Protection Insurance.” Wells Fargo’s original settlement, according to a remediation plan, was proposed at $64 million. 

“Reaching this agreement, which leverages remedies available in our existing remediation plan, is an important step in making things right for customers impacted by this issue,” Wells Fargo said in a statement provided to AFN. “We will continue sending individualized letters to customers that clearly set out the remediation amount due to them, as well as a check for that amount. This process will continue until the remediation is complete.”

Click here to read how the scheme played out, according to the filing.