Wells Fargo Sued Over Allegedly Inadequate Compensation Efforts Stemming from Wrongfully Charged Loan Fees

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Wells Fargo faces a proposed class action lawsuit over its allegedly meager attempts to compensate mortgage applicants who were notified that the bank had wrongly assessed certain fees during the loan origination process. 

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The 17-page lawsuit alleges that Wells Fargo incorrectly charged borrowers “return to float” fees, which the bank imposes upon mortgage applicants who wish to unlock their loan’s interest rate during processing. According to the suit, the bank alerted consumers to the float-fee errors in “vague” letters issued around December 2022 that included a cashier’s check as supposed reimbursement for the improper charges, interest on the fees, related costs and an “amount for the time these funds were unavailable.” 

The case claims that the letters sent to borrowers failed to provide any explanation as to how, why or when the errors occurred and did not offer sufficient accounting or itemization to show the extent of the float-fee problems. 

“It is therefore impossible for borrowers to determine the amount of their actual damages, including their out-of-pocket harm,” the complaint asserts, characterizing Wells Fargo’s “cryptic” letters as a “throw away effort” solely to protect itself from liability for “yet another illegal business practice.”

The filing alleges that the enclosed checks were “wholly inadequate” and argues that Wells Fargo has failed to reimburse customers for the massive profits it reaped as a result of withholding the erroneously charged fees “for over a decade.” 

The Wells Fargo lawsuit contends that the bank knowingly concealed the errors for years and issued the letters to consumers in an attempt to discourage them from investigating the matter further and pursuing recompense.

The case charges that the checks are no more than a “flippant” attempt by Wells Fargo to “buy off” customers and mitigate the bank’s liability at borrowers’ expense. 

The class action lawsuit looks to represent all individuals in California who received a letter from Wells Fargo alerting them that one or more return to float fees may have been incorrectly assessed during the loan origination process, with a check enclosed to purportedly compensate for the error.

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