Wells Fargo has agreed to pay $56.85 million to settle a class‑action lawsuit that claims some customers’ credit scores were harmed during the COVID‑19 pandemic.
The bank did not admit wrongdoing but agreed to the settlement after a lawsuit alleged it violated the Fair Credit Reporting Act by improperly reporting mortgage forbearances, which allows borrowers to pause or reduce payments during financial difficulty, according to legal news site Top Class Actions.
The lawsuit alleged that during the early months of the pandemic, Wells Fargo placed some borrowers into mortgage forbearance after they expressed financial hardship or potential hardships. However, the lawsuit charged that Wells Fargo violated the Coronavirus Aid, Relief, and Economic Security (CARES) Act by inaccurately reporting account information to credit bureaus, potentially harming consumers' credit scores.
A judge in San Diego, California, is scheduled to decide whether to approve the settlement on April 17. If approved, affected customers could receive payments from the settlement fund. More details about eligibility and potential compensation are available at CaresActLitigation.com.
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