Wells Fargo and HSBC agree to settlements over alleged insurance overcharging

The proposed class action suit claimed the banks charged higher rates to struggling borrowers

Wells Fargo and HSBC have agreed to end a proposed class action lawsuit before it even begins, agreeing to refund hundreds of thousands of borrowers who may have been overcharged for homeowners insurance.

The proposed class action suit, filed recently in federal court in Miami, attacked a practice known as “lender placed” or “forced place” insurance that become common during the financial crisis. As homeowners fell behind on their homeowners insurance payments, banks were able to “force” a policy on these customers instead in order to protect the banks’ collateral in case of fire or home damage. These new policies were often at a higher rate for the borrower.

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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