Wells Fargo ()
In a motion for a preliminary injunction filed Aug. 4, plaintiff Katherine Jacob asked the court “to prevent imminent, irreparable harm” to her and potential other class members’ credit when they were forced to take on insurance as part of Wells Fargo-issued auto loans. The increased monthly payments for unwanted insurance led some borrowers into delinquency, which was reported to credit agencies, “thereby damaging plaintiff’s and the other class members’ credit scores and creditworthiness.”
The injunction would require defendants to “investigate and correct all inaccurate information” reported to the credit bureaus, by issuing “any corrective statements, concerning plaintiff’s and the other class members’ credit report, credit history and creditworthiness.”
“Wells Fargo admitted that its practices in selling CPI were unfair to its customers, and have offered to refund certain fees associated with its unlawful conduct,” the brief stated. “But that’s not enough.”
An internal review of bank practices discovered that Wells Fargo forced some 800,000 auto loan recipients to take on so-called collateral protection insurance as part of the loan. The insurance was included even when borrowers had their own.
According to the report, the added insurance cost pushed 274,000 customers into delinquency.
Since the existence of the report became public late last month, New York state regulators in the Department of Financial Services and the state Attorney General’s Office have issued subpoenas of both Wells Fargo and the firm that produced the report, sources with knowledge of the moves by both offices have confirmed.
In a statement, Chicago-based DiCello Levitt & Casey name attorney Adam Levitt, whose firm is driving the suit, said the purpose of the motion was to start holding Wells Fargo and its codefendant, National General Insurance, “immediately accountable for their wrongful conduct.”
“While the negative credit reporting and the ongoing consequences thereof comprise only one facet of the damages sustained by plaintiff and the other class members here, it is the facet where our requested injunction can stop the ongoing bleeding and start letting plaintiff and the other class members start rebuilding their decimated credit caused by Wells Fargo’s culture of larceny,” he said.
Wells Fargo spokeswoman Catherine Pulley declined to comment on the motion. A spokeswoman for the National General could not be reached.