Wells Fargo slapped for cheating student borrowers

Wells Fargo (WFC) was fined $3.6 million and will have also have to provide $410,000 to thousands of student loan borrowers the bank deceived or treated unfairly, the Consumer Financial Protection Bureau said Monday.

The bank engaged in illegal practices in servicing private student loans that hiked costs and unfairly penalized certain borrowers by failing to provide payment information, failing to update inaccurate credit report information and charging illegal fees.

According to the CFPB, Wells Fargo processed payments in a way that maximized fees for many consumers. Specifically, if a borrower made a payment that wasn’t enough to cover the total amount due for all loans in an account, the bank divided that payment across the loans in a way that maximized late fees rather than satisfying payments for some of the loans.

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