Wells Fargo Destroyed the Credit of a Military Member

We are going through almost the exact same thing! My son has always
had insurance coverage on his vehichle and wells fargo for the 3rd
time has stated his insurance has lapsed. They were going to go
through the reposession process and we so we made a payment with
insurance added and then our son will make a payment with insurance
added. Once they receive all the statements showing he has had
insurance they say he will be 2 payments ahead!!!!!!!!! This has been
going on for a year and a half. Report them to the OCC!!!! We have got
an investigation going and they are the ones who regulate federal
banks. We now remind Wells Fargo we have an investigation going which
seems to calm them down some. Please report them and then let Wells
fargo know. I will keep watch on how you work this out.Jenny

I have to agree with the others. Though you can hire Someone to fix
your credit for you. They will take legal action if they don't fix it.
But it will cost a little. Depends on how many things need to be
fixed. I did that with my husbands credit. He had way to many things
and they weren't reporting the correct things. Needless to say his
score went up. So it helped him out alot. They are called Credit
Justice. You should try them out.

This is specifically designed to protect you while you are overseas.

Military or not, this is your fault. You changed insurance carriers
and didn't inform Wells Fargo. I'm sure if you read your contract it
clearly states that if you don't provide proof of insurance then they
are within their rights to do so for you and charge you whatever they
want. And as far as the interest rate issue is concerned, again it
was your responsibility to provide whatever documentation that was
required and make sure that your application was accepted.

Bottom line? You destroyed your own credit.

While I personally appreciate the sacrifice you made and the time you
gave representing and serving our country, in all honesty, Chad, it
doesnt sound like W-F destroyed your credit. You did.

Yes, there are certain things that they were supposed to be doing for
you as a member of the armed services, but it doesnt sound like you
did your part and kept them informed.

You act like they did something deceptive to add insurance to your
account when you admit that you cancelled your old policy and never
made them aware (until well after the fact) that you obtained new
coverage. I'm sure if you read the terms of your loan agreement, you
will see that there is a clause regarding maintaining insurance on the
vehicle for the duration of the loan and what steps they can and will
take if you fail to show proof of that coverage.

Others also pointed out that the time to adjust the interest rate on
this account was prior to your deployment, not after you've returned
and after the damage has been going on for over a year!

My sister is in the Navy and returned from a tour of Iraq about 9 mos.
ago. My sister broke her lease on her apartment, made arrangements
for her vehicle, contacted all her creditors, put any valuables in
storage and had her mail forwarded before she left and she still was
in contact with us and the friends she'd asked to help her out while
she was gone the entire time.

So it's not as if you were deployed and had one week to prepare to go
overseas and get your life in order. It's also not as if you were
completely cut off from communicating with the world while you were
over there. SOMEONE had to be "holding down the fort back home" so to
speak.

I'm sorry Chad, but I have very little sympathy for your situation and
I'm even a little irritated that you are trying to use your service as
an excuse for your own mistakes in judgement.

While it may seem unfair how all of this played out, ignorance is
never an excuse to avoid responsibility. Surely being a member of our
Armed Forces should have taught you that!

According to a letter dated December 9 2002 which can be found at
http://www.fdic.gov/news/news/financial/2002/FIL02134.html

"The Act protects members of the military from enforcement of their
legal obligations incurred prior to active duty that they are unable
to meet due either to their absence from home or from the financial
consequences of significantly lower military pay. The Act does not
apply to any obligation entered into by a military borrower after his
or her military service has commenced."

"Six Percent Interest Rate "Cap" - The Act limits to 6% per annum the
amount of interest that can be charged on financial obligations
incurred prior to active duty, unless a court finds that the
borrower's ability to pay has not been "materially affected" by
service. But the limitation does not apply to debt incurred after
entry on active duty. The rate limitation is effective upon
commencement of active duty, regardless of when the creditor is
notified, and continues throughout the period of active service.
Creditors must, therefore, be prepared to make adjustments to the
customer's account retroactive to the first day of active duty.
"Interest" under the Act also includes any fees charged, such as
service or renewal charges (but not bona fide insurance costs), and
such fees must be taken into account when calculating the 6% limit. As
well, the interest charges in excess of the 6% limit are to be
forgiven and may not be collected after release from active duty
(526)."

It sounds to me as if, unless they can prove that your entry into
military service didn't "materially affect" your ability to pay off
debt you owed before you joined, they cannot charge you more than 6%
interest (including fees but *not* including insurance) on that debt,
and that this will continue as long as you are a member of the
military. That's why they want proof that you are still a member of
the military.

But it is not clear from your letter when you bought the car. I think
they ought to give you a detailed payment history of your loan and the
interest rate to be adjusted if you bought the car before you joined
the service. But I think the late fees, the damage to your credit
report, and the insistence on a co-signer are reasonable given that
you canceled your insurance and didn't tell them about the new policy
and that you *knew* you canceled your insurance and didn't tell them
about the new policy, and what they owe you on those things depends on
what they agreed to do.

Obviously the JAG officer will be better able to sort through this
than I am. I'm not a lawyer. And I wish you luck in figuring
something out that you can live with. But I do think a lot of trouble
could have been avoided if you had notified them of the new policy
when you got it.

One thing that isn't clear in the letter is, did the OP notify the
bank in advance of his deployment? Does failing to do so entitle a
qualified member of the military to get interest rates lowered
retroactively? (I would find it difficult to believe that's the
case!)

A similar thing happened to me that happened to Squad 51. Once I
dropped my insurance I was informed by the bank that insurance would
be added if we did not provide proof. We provided them with proof and
everything was fine. Is it possible that the bank did try to contact
you and let you know the insurance was going to be added? They
certainly should have at least done you the courtesy of sending you a
letter, but you may never have received the letter if you were already
deployed. I think that if your letter is accurate and the bank has
assured you that your credit will be fixed, it certainly should be.
What they've done over a simple mistake is above and beyond. It's
pretty easy to see what happened, given the timing of all of these
events.

Our old insurance company notified them that we had cancelled our
insurance, so they contacted us twice by mail to provide the new
insurance information. In the correspondence it was spelled out that
if we did not provide them with proof of adequate insurance by XYZ
date, they would take insurance out for us and add the cost to our
monthly mortgage. We sent the proof from the new insurance company
and everything is great.

What I am saying is I am sure that Wells Fargo probably tried to
contact you by mail a few times before this action was taken. As far
as the S&SA you have to arrange for that with your creditors before
you deploy. Otherwise how would they know that you are deployed?

I do have to agree with the others, you needed to supply them with
proof of insurance from the new carrier. If not, they are within
their rights to provide insurance coverage at a cost to you.

As far as the interest, I believe (I may not be right) that you had to
arrange for this before you were deployed not after the fact.

You needed to inform WF of the change in insurance. As far as they
knew, you dropped all coverage. As for cosigning, there are rules
that apply to who can cosign a loan. A lot of them have to do with the
location and proximatry of the people. My mom was able to cosign my
first car loan (many years ago) because I lived within the same state.
They were unable to cosign for my brother who lived out of state.

Something is left out of this story.


Good Day

"...I had changed insurance companies for my vehicle. Wells Fargo was
not aware of the change, but knew that the old insurance policy was
cancelled. Without my knowledge, they added insurance onto my loan."

So, you didn't inform them that you changed insurance, and you're
upset that they didn't inform you of the insurance they added?

That one makes my head hurt.

I have to echo cal's comments below. When I had a loan out on my
truck, I had to provide proof of insurance. I guess I would just
assume that if I changed insurance companies, I'd have to provide that
new information to the loan holder. I can't blame Wells Fargo for
wanting to be sure there was insurance on a vehicle that they
technically owned.

If they knew you had canceled your car insurance and they didn't know
you had taken out another policy, why wouldn't they insist on taking
some of the money you gave them and putting it toward car insurance?
Don't car loans usually require that the car be insured? Wouldn't it
make sense for the bank to require that you provide them with proof
that the car is insured? I'm really confused about this.