Wells Fargo and HSBC Holdings have agreed to give refunds to possibly hundreds of thousands of borrowers for alleged insurance overcharges. Bank of America also has reached a tentative settlement deal.
The latest class-action settlements -- which follow on the heels of a recently approved deal under which JPMorgan Chase will refund up to $300 million to borrowers -- focus on "lender placed" or "forced place" insurance, or homeowners insurance policies forced on borrowers who failed to maintain their policies as required. The practice is prohibited for five to six years under the Chase, Wells Fargo, and HSBC settlements. Payments in the case against U.K.-based HSBC are capped at $32 million, but how much Wells Fargo and Bank of America will pay out remains uncertain. Class members are eligible for refunds up to 13 percent of the entire premium billed from HSBC and up to 11 percent from Wells Fargo.