Wells Fargo & Co. will pay customers at least $386 million to settle class-action claims that the bank signed them up for auto insurance they did not want or need when they took out car loans.
The proposed settlement was disclosed in filings last week in U.S. District Court in Santa Ana, Calif., and requires a judge’s approval. National General Insurance Co., an underwriter, will pay an additional $7.5 million, making the total customer payout at least $393.5 million, according to the filings.
Wells Fargo denied wrongdoing, but said it settled to avoid the risks, cost and distraction of litigation, and has set aside enough money for the payout. The defendants will also pay up to $36.5 million for the customers’ legal costs, court papers showed.
In an email, Wells Fargo called the settlement “an important step in making things right for customers.” “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,” it added.
