Military personnel and their families are taking on Wells Fargo in court, claiming the bank unfairly charged them and then tried to cover it up.
Since at least 2006, Wells Fargo has been accused of hiding extra charges for interest rates on credit cards used by members of the U.S. armed forces and their families.
Military Families Sue Wells Fargo
Families from the military have brought up serious accusations against Wells Fargo. They say the bank wrongly increased the total amount they owed, then added extra compound interest on what was left to pay.
In 2022, some of these families noticed something was wrong with their bank statements. They got letters from Wells Fargo that didn't make sense, reports Banking Dive, a website that covers financial news.
The lawsuit claims Wells Fargo has been overcharging people who serve in the military all over the country for more than ten years.
This isn't a small issue. The case was taken to the Eastern District Court of North Carolina on March 20, and the families are asking for more than $5 million because of the bank's actions.
The lawsuit against Wells Fargo points out that the bank didn't follow the Servicemembers Civil Relief Act (SCRA). This law is meant to protect those in active duty and their families from certain civil issues while they are serving.
Under this law, any loans given to military personnel should not have an interest rate higher than 6%. It also protects their property from being taken away or sold without permission.
The SCRA is there to make sure that servicemembers can do their job without worrying about these issues back home, says the US Courts website.
Additionally, the lawsuit claims Wells Fargo didn't stick to rules set by the Credit Card Accountability Responsibility and Disclosure Act, leading to a demand for over $5 million in damages.
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Wells Fargo Responds to Military Lawsuit
Wells Fargo has stated its dedication to supporting military servicemembers and ensuring they receive the rights and protections under the Servicemembers Civil Relief Act (SCRA). "We are currently examining the details of this complaint," the bank said.
However, those suing the bank claim that Wells Fargo has failed to respect both the spirit and the specific rules of these laws. They're pushing for the lawsuit to become a class action. This means that even customers who don't know they were wronged might still get some money back.
Lawyers for the plaintiffs have also charged Wells Fargo with breaking the Truth in Lending Act, which demands that lenders clearly tell customers about any fees and charges. They say the bank also did not follow the Military Lending Act, which offers extra lending protections for soldiers, veterans, and their families.
Moreover, Wells Fargo faced criticism for misleadingly advertising a strong bond with military members and was sued in 2016 for not preventing a fake-account scandal, sending vague letters to affected customers.
Plaintiffs claimed the bank intentionally confused customers to avoid claims. The case was dismissed when a US Treasury agency stated the bank's compliance didn't necessitate ongoing legal restrictions, complicating the narrative around its practices.
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