Wells Fargo is facing a lawsuit claiming the bank overcharged credit card interest rates and fees for thousands of American soldiers and their families, according to a complaint filed recently in federal court.
The lawsuit claims Wells Fargo failed to follow the federal Servicemembers Civil Relief Act, which allows loan debts to be cut to a 6% interest rate after soldiers are called to duty. The law also requires banks to forgive interest above 6%, according to the suit filed March 20 in U.S. District Court for Eastern North Carolina.
The suit also cited alleged violations of the Credit Card Accountability Responsibility and Disclosure Act.
The San Francisco-based bank, which has its largest employment hub in Charlotte, marketed itself as an institution dedicated to military members, veterans and their families, the suit said. But the bank unlawfully increased the principal balance amounts due on credit cards and charged compound interest on inflated balances, the plaintiffs claim.
One plaintiff from Georgia said she had numerous interest-bearing accounts with the bank and credit cards during her three tours in Iraq and with the Inactive Ready Reserve, according to the suit. A few other plaintiffs listed by name said they had similar experiences with services offered by Wells Fargo, they stated in the suit.
The suit also claimed that Wells Fargo concealed overcharges, which were not discovered until 2022 when the bank sent misleading correspondence and payment checks to some military families. Attorneys for the plaintiffs said they are trying to get class-action certification for their lawsuit.
Wells Fargo “continued the nationwide practice of overcharging active military servicemembers for more than a decade,” the attorneys claimed in the suit.
The total claim for the proposed class members is more than $5 million, according to the suit. It involves military customers who received reduced interest and/or fee benefits from Wells Fargo on or after Jan. 1, 2006.
Plaintiffs in the case also claim Wells Fargo violated the Truth in Lending Act, which requires lenders to disclose information about all charges and fees associated with a loan; and the Military Lending Act, a federal law that provides special protections for active duty service members.
A Wells Fargo spokesman said the company is committed to supporting all military servicemembers and providing the benefits and protections required by SCRA. “We are still reviewing the details of this complaint.”
Attorneys Paul Puryear Jr. of Raleigh and Knoll Lowney of Seattle represent the plaintiffs.
Legal matters continue for Wells Fargo
Wells Fargo has faced numerous sanctions since its 2016 fake accounts scandal, when it was discovered that hundreds of thousands of its workers opened millions of accounts for customers without their permission for over a decade to meet sales goal.
Wells Fargo reached a deal with federal authorities and agreed to pay a $3 billion settlement in February 2020, and later another $1 billion to shareholders in May 2023.
In December, former Wells Fargo CEO Tim Sloan sued the bank for more than $34 million for withholding pay after he retired in 2019 in the wake of the fake customer accounts scandal.
Wells Fargo also agreed to pay a $35 million civil penalty in September for overcharging more than 10,900 customers for advisory fees before 2014 through the end of December 2022.
Wells Fargo serves 69 million customers in 28 countries and operates in more than 5,500 locations. The financial services company employs over 247,000 people, with about 27,000 in Charlotte.
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