Wells Fargo to Pay $56.85 Million Settlement. Are You Eligible?

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 claimed 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 said that during the early months of the pandemic, Wells Fargo placed some borrowers into mortgage forbearance after they expressed financial hardship or potential hardships. The lawsuit accused Wells Fargo of violating 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 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.

USA TODAY contacted Wells Fargo regarding the lawsuit.

Who is eligible to receive part of the Wells Fargo settlement?

Only people who own or have owned property in California with a Wells Fargo mortgage will be eligible to participate in the lawsuit, according to the settlement website.

To be eligible, they must have received a CARES Act forbearance on or after March 27, 2020, according to the settlement’s website. Their accounts must have been “current” and reported as “in forbearance,” or something similar, by Wells Fargo to a consumer reporting agency.

What is the CARES Act?

In March 2020, Congress enacted the CARES Act to provide financial support to people harmed financially by the pandemic.

Under the act, lenders such as Wells Fargo were required to report up-to-date accounts placed under “forbearance” because of pandemic-related financial hardship as “current,” meaning the loan would show as if it were up to date even if the borrower had requested a pause on payments.

The act was intended to assist borrowers during the pandemic and to ensure their credit scores would not be harmed.

The lawsuit accuses Wells Fargo of violating the act by misreporting accounts placed under “forbearance” during the pandemic to credit bureaus.

When is the final day to apply to take part in the settlement?

Consumers who qualify do not need to apply to be included in the settlement and will receive an automatic payment from the settlement fund after the final hearing, if the settlement is approved.

Consumers who are eligible but object to receiving the payment may opt out of receiving a payment from the settlement fund, according to the settlement website. All opposed must file a written objection to the settlement with the Superior Court of California in San Diego, on or before the objection deadline, March 25, 2026.

Those who would like to speak at the final court hearing must submit a written Notice of Intention to Appear, which must be filed and postmarked on or before the objection deadline.

How much is the settlement worth?

In total, Wells Fargo has agreed to pay $56.85 million.

A court will decide whether to approve that settlement at the final court hearing April 17.

Julia Gomez is a Trending reporter for USA TODAY and covers popular toys, scientific studies, natural disasters, holidays, and trending news. Connect with her on LinkedIn, X, Instagram, and TikTok: @juliamariegz, or email her at [email protected].

This article originally appeared on USA TODAY: Wells Fargo to pay $56.85 million settlement. Are you eligible?

Reporting by Julia Gomez, USA TODAY / USA TODAY

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