Wells Fargo will pay a $56.85 Million Settlement. Are You Qualified?
Wells Fargo has agreed to pay $56.85 million to settle a class-action lawsuit that claims some customers’ credit scores were damaged during the COVID-19 pandemic.
The bank denied wrongdoing but agreed to the settlement after a lawsuit alleged it violated the Fair Credit Reporting Act by improperly reporting mortgage forbearance, which allows borrowers to pause or reduce payments during financial hardship, according to legal news site Top Class Actions.
The lawsuit said that in the early months of the pandemic, Wells Fargo put some borrowers into mortgage forbearance after they expressed financial difficulties or potential difficulties. The lawsuit accused Wells Fargo of violating the Coronavirus Aid, Relief, and Economic Security (CARES) Act by falsely reporting account information to credit bureaus, which could damage consumers’ credit scores.
A judge in San Diego is scheduled to decide whether to approve the settlement on April 17. If approved, affected customers could receive payments from the settlement fund. More information about eligibility and possible compensation is available at CaresActLitigation.com.
USA TODAY contacted Wells Fargo about the case.
Who is eligible for a Wells Fargo home equity loan?
Only people who own or own property in California with a Wells Fargo loan will be eligible to participate in the lawsuit, according to the settlement website.
To be eligible, they must have received a CARES Act waiver on or after March 27, 2020, according to the settlement’s website. Their accounts must be “current” and reported as “in forbearance,” or something similar, by Wells Fargo’s consumer reporting agency.
What is the CARES Act?
In March 2020, Congress enacted the CARES Act to provide financial assistance to people affected by the pandemic.
Under the act, lenders such as Wells Fargo were required to report current accounts placed under “forbearance” due to pandemic-related financial difficulties as “current,” meaning the loan would show as current even if the borrower had requested a moratorium on payments.
The move was intended to help borrowers during the crisis and ensure that their credit scores would not suffer.
The lawsuit accuses Wells Fargo of violating the act by misreporting accounts placed under “forbearance” during the violence to the credit bureaus.
When is the deadline to apply to become part of the agreement?
Eligible consumers do not need to apply for settlement and will receive an automatic payment from the settlement fund after the final hearing, if settlement is approved.
Consumers who are eligible but object to accepting payment can opt out of receiving payment from the settlement fund, according to the payment website. All objectors must file a written objection to the settlement with the California Supreme Court in San Diego, on or before the objection deadline, March 25, 2026.
Those who wish to speak at the final court hearing must submit a written Notice of Intent to Appear, which must be filed and marked on or before the objection deadline.
How much is the payment?
In total, Wells Fargo agreed to pay $56.85 million.
The court will decide whether to accept the settlement at the final hearing on April 17.
Julia Gomez is USA TODAY’s trending reporter and covers popular toys, science studies, natural disasters, holidays, and breaking news. Connect with her on LinkedIn, X, Instagram, and TikTok: @juliamariegz, or email her at [email protected].
This article first appeared in USA TODAY: Wells Fargo to pay $56.85 million in cash. Are you eligible?
Reporting by Julia Gomez, USA TODAY / USA TODAY
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