Wells Fargo Hit with Class Action in Penn. Over Allegedly Deficient Repossession Notices

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A proposed class action alleges Wells Fargo Bank, N.A. has sent Pennsylvania debtors non-compliant repossession notices that failed state the intended method of disposition of the repossessed vehicles, redemption rights, and an accurate redemption amount.

According to the suit, the notices informed the eight plaintiffs that their repossessed vehicles would be sold at a “private sale,” i.e. a wholesale auction the public is not invited to attend. This statement regarding the cars’ intended disposition, i.e. the act of selling or disposing of an asset, is “systematically not true” given the plaintiffs’ repossessed vehicles, with the exception of one, were sold at the public Manheim Auction in Grove City, Ohio, the lawsuit argues.

The intended disposition of a vehicle, as well as the date and time of the sale, is material information to debtors because they, as members of the public, could attend a public auction and bid on their repossessed car, the case explains. This information is required to be accurately disclosed by Wells Fargo in the notice of repossession, the lawsuit stresses.

The complaint goes on to allege Wells Fargo also failed to inform the plaintiffs of added fees for storage, redemption, reinstatement, administration and retrieval of personal property that would be required to be paid in addition to the reinstatement or redemption amount disclosed in the notice of repossession. According to the suit, the bank either had an arrangement with third parties, such as the repossessor, repossession broker, or auction, that required the additional fees be paid by the debtor or had knowledge of and consented to the assessment of such fees.

Because the additional fees were not disclosed in the notice of repossession, the amounts listed in the notice for redemption or reinstatement were inaccurate, the lawsuit argues, claiming the fees were not “actual, necessary, or reasonable expenses” given they were not expenses incurred by Wells Fargo.

Still further, the case claims Wells Fargo transported the plaintiffs’ vehicles to auction prior to the expiration of the 15-day minimum redemption period listed in the notice of repossession. Relatedly, the lawsuit says the notice improperly limited the amount of time the plaintiffs had to redeem their vehicles to 15 days from the date of the notice when, by law, they had “the absolute right to redeem their vehicle up until the date of the sale.”

The plaintiffs further contend that the notice of repossession sent by Wells Fargo was “unreasonably confusing” in that it included conflicting statements informing the debtor that they could get their vehicle back by paying “the full amount you owe (not just the past due payments),” and later stating the borrower could either pay the full amount or just the past due payments. The letter also used the terms “reinstate” and “redeem” interchangeably when the two terms are separate processes, the case relays.

Finally, the lawsuit criticizes Wells Fargo’s alleged failure to send post-sale notices by certified mail, as well as the bank’s apparent use of unlicensed repossession brokers.

Initially filed in the Philadelphia County Court of Common Pleas, the lawsuit has been removed to Pennsylvania’s Eastern District Court. The lawsuit alleges violations of the Uniform Commercial Code and Motor Vehicle Sales Finance Act.

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