Another slap for a big bank. Wells Fargo will pay some New York consumers for the questionable credit practices of one of its companies.
It will provide $2 million in restitution to people who hold Nowline Visa Platinum credit cards. New York’s Department of Financial Services found that a company affiliated with the bank enrolled people with shaky credit, falsified credit applications and used their homes as security.
That’s a no-no in New York State. In addition, the company also failed to give the card holders discounted interest rates they promised.
But the bigger issue involves using people’s homes to guarantee their credit. That’s almost like using your home as collateral to gamble. New York State’s Financial Services Commissioner Benjamin Lawsky said, “Our investigation uncovered that this Wells Fargo affiliate put borrowers’ homes on the line for routine credit card purchases – creating substantial and undue risks for consumers.” I
f you are one of those people you might ask, “Does Wells Fargo Owe You Money?” In a settlement, Wells Fargo agreed to repay about 1300 people throughout New York. Each may receive about $1600.
The agreement requires Wells Fargo to reduce interest rates on these cards and release its hold on mortgages. It must also notify the bankruptcy trustee for all New York holders of the Nowline Visa Platinum Card that Wells Fargo is no longer a secured creditor.
What do you do?
The Department of Financial Services agreement with Wells Fargo requires the bank to do all the work. It must reach out to you and let you know that it will provide payment, reduce the interest rate, and contact the bankruptcy trustee.