Important Update: The Settlement received final approval from the Court and is now effective. Settlement payments to eligible Class Members will be mailed by mid-January 2022.
You may view a copy of the Settlement Agreement here.
WHAT IS THIS LAWSUIT ABOUT?
The Settlement resolves a class action lawsuit against Wells Fargo in the United States District Court for the Central District of California, Armando Herrera, et. al, v. Wells Fargo Bank, N.A., Case No. 8:18-cv-00332-JVS-MRW. The lawsuit alleges that Wells Fargo failed to provide customers with a partial refund of the fees paid for Guaranteed Asset Protection or Guaranteed Auto Protection (“GAP”) after customers paid off their Finance Agreements early.
HOW DO I KNOW IF I AM PART OF THE SETTLEMENT?
There are two classes who are part of this Settlement: the Class and the Statutory Subclass.
The “Class” means all persons in the United States (a) who entered into Finance Agreements with GAP Agreements that were assigned to Wells Fargo; (b) whose Finance Agreements terminated as the result of an Early Payoff that occurred during the Class Period; and (c) who did not receive a GAP Refund. The Class Period is different depending on the State in which the Finance Agreement originated. Please see the Settlement Agreement for more information.
The “Statutory Subclass” means those persons (a) who entered into Finance Agreements with GAP Agreements that were assigned to Wells Fargo; (b) whose Finance Agreements were subject to State Refund Laws; (c) whose Finance Agreements terminated as the result of an Early Payoff that occurred during the Statutory Subclass Period; and (d) who did not receive a GAP Refund from Wells Fargo, or for whom Wells Fargo did not receive written confirmation from a Dealer or GAP Administrator that the GAP Refund was paid. Please see the Settlement Agreement for more information.
If you are a Class Member, including a member of the Statutory Subclass, a Notice was mailed to you which identifies whether you are a member of the Statutory Subclass.
If you believe you may be a Class Member but did not receive a Notice, please call the Settlement Administrator at 1-833-636-2118.
WHAT DOES THE SETTLEMENT PROVIDE?
Under the Settlement, Wells Fargo has agreed to provide the following benefits as consideration for the resolution and release of the Class Members’ claims:
- Business Practice Change. No later than January 1, 2022, Wells Fargo will implement processes to directly provide to customers, on a go-forward basis, Early Payoff GAP Refunds within a reasonable time after receipt of an Early Payoff so long as (1) the customer purchased GAP from a Dealer at the time they entered into their Finance Agreement; (2) the customer chose to finance the cost of the GAP and such cost is included in a Finance Agreement assigned to Wells Fargo; (3) Wells Fargo received the Early Payoff from the customer; (4) the customer’s GAP Agreement provides for an Early Payoff GAP Refund in the event of an Early Payoff; and (5) the customer has not previously received a GAP Refund. Customers who meet these criteria will not be required to take any action other than completing an Early Payoff to receive an Early Payoff GAP Refund. This obligation will continue until January 1, 2026. Plaintiffs’ expert’s estimate of the impact of this business practice change is included in Plaintiffs’ motion for preliminary approval of the settlement, which can be found here.
- Past GAP Refunds to Statutory Subclass Members. Members of the Statutory Subclass have received or will receive a payment directly from Wells Fargo equal to the amount of their Early Payoff GAP Refund (without any deduction for cancellation fees) plus compensation for the loss of use of these funds based on the one-year constant U.S. maturity treasury rate, compounded annually from the date of the Early Payoff. Wells Fargo represents and warrants that it has paid $33,357,919.81 collectively to the members of the Statutory Subclass between December 20, 2018 and March 31, 2021. In the event that Wells Fargo identifies any additional members of the Statutory Subclass who have not yet received these payments, then Wells Fargo represents and warrants that it will do so pursuant to the terms of the Settlement. These amounts have been or will be paid directly by Wells Fargo and are in addition to and separate and apart from the Settlement Fund described below. In addition, each Statutory Subclass Member will also receive a payment of up to $5.00 (“Additional Compensation”) to be paid out from the Settlement Fund described below.
- Past GAP Refunds to Non-Statutory Subclass Members. Class Members whose Finance Agreements were not governed by the State Refund Laws (the “Non-Statutory Subclass Members”) who submitted a claim verifying that they did not previously receive a GAP refund will be eligible to a receive a settlement payment up to the full amount of the Early Payoff GAP Refund without any deduction for cancellation fees (an “Approved Claim”). The settlement payments to the Non-Statutory Subclass Members may be reduced on a prorated basis depending on the amounts remaining in the Settlement Fund as discussed below. The deadline to submit a Claim Form passed on October 6, 2021.
- Settlement Fund. Wells Fargo will establish a settlement fund (“Settlement Fund”) totaling $45,000,000.00 to pay: (1) the Approved Claims for GAP Refunds to the Non-Statutory Subclass Members; (2) the $5.00 Additional Compensation payments to the Statutory Subclass Members; (3) the Fee and Expense Awards to Class Counsel approved by the Court; and (4) any Service Awards to the Class Representatives approved by the Court. If the collective total of these items exceeds $45,000,000.00, then the settlement payments to the Non-Statutory Subclass Members and the $5.00 Additional Compensation payments to the Statutory Subclass Members will be reduced on a prorated basis to account for the difference. Each Class Member’s payment from the Settlement Fund will be reduced by the same percentage.
- Notice and Administration Costs. Wells Fargo will separately pay for the cost of providing Notice to the Class and the administrative expenses incurred by the Claims Administrator. These costs will be paid directly by Wells Fargo and will not reduce the Settlement Fund.
NOTE: Early Payoff GAP Refunds will be calculated using the pro rata method. No cancellation fee shall be applied. The Claims Administrator will be responsible for calculating the Early Payoff GAP Refunds based on the information provided by Wells Fargo.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT
NOTE: YOUR LEGAL RIGHTS WILL BE AFFECTED WHETHER YOU ACT OR DO NOT ACT. PLEASE READ THIS WEBSITE AND THE ENTIRE NOTICE CAREFULLY.
|OPTION AND DEADLINE
||If you are a member of the Statutory Subclass, you do not need to do anything to receive the benefits of this Settlement for the vehicle identified in the Notice you received.
If you are a member of the Class but are not a member of the Statutory Subclass and did not submit a properly completed Claim Form by the deadline, you will not receive any cash compensation from the Settlement Fund and the Settlement will bar any claims you may have unless you timely opted out of the Settlement.
|SUBMIT A CLAIM FORM BY OCTOBER 6, 2021 (PASSED)
||If you are a member of the Class but are not a member of the Statutory Subclass, then you must have completed and signed the Claim Form sent to you and submitted it to the Claims Administrator by OCTOBER 6, 2021.
If you are a member of the Statutory Subclass, you may not submit a Claim Form.
|EXCLUDE YOURSELF FROM THE SETTLEMENT BY OCTOBER 6, 2021 (PASSED)
||You could have filed a written request to exclude yourself or “opt out” from the Settlement by OCTOBER 6, 2021. If you did so, you will not receive any money from the Settlement Fund and you will not release your claims in this lawsuit. (See Section 11 of the Settlement Agreement)
If the Settlement is granted final approval by the Court and you did not timely “opt out” of the Settlement, then you will release the claims described in Section 19 of the Settlement Agreement.
|OBJECT TO THE SETTLEMENT BY OCTOBER 6, 2021 (PASSED)
||If you believe the Settlement is unfair or inadequate, you could have filed a written objection to the Settlement by OCTOBER 6, 2021, so long as you did not file a request to exclude yourself from the Settlement. (See Section 17 of the Settlement Agreement)