Wells Fargo has reached a $4 million settlement with the U.S. Justice Department in Los Angeles over allegations it illegally repossessed more than 400 cars owned by members of the military without a court order, it was announced today.
The settlement, which is subject to court approval, resolves alleged violations of the Servicemembers Civil Relief Act, which protects service members against certain civil proceedings that could affect their legal rights while they are in the service.
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s civil rights division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected military members, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected soldiers.
The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, if any vehicle it is planning to repossess is owned by an active duty service member.
