SAN FRANCISCO–Wells Fargo has reached yet another settlement for alleged violations of its own customers, this time for practices related to Guaranteed Auto Protection (GAP) fees.
After three years of legal battles, U.S. District Judge James Selna of the Central District of California on Tuesday granted preliminary approval of a settlement of a case that alleged the company has withheld several hundred million dollars in GAP fees it was supposed to give back to consumers.
The settlement is for approximately $500 million.
Wells Fargo has previously said it does not receive the GAP fees and therefore is not responsible for any refunds. Instead, the lender said customers should seek refunds from the dealerships that sold them the vehicles.
In a statement, the bank said it "disclosed in 2017 that we had discovered issues with how Guaranteed Auto Protection (GAP) refunds are issued to customers when their loans end early. While we have been remediating customers, we have also been looking for ways to make this process easier for them. For example, we are building the capability to deliver GAP refunds directly to consumers nationally when their loans end early, which goes above and beyond requirements in most states. After we issue these refunds, we'll work with dealers to be reimbursed."
The bank has declined to comment following the most recent settlement.