Consumer complaint received 2025-12-23 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Billing problem
Company: WELLS FARGO & COMPANY
State: FL

Complaint narrative:
Beginning in XX/XX/XXXX, Wells Fargo Auto engaged in improper and deceptive loan servicing practices involving payment application, internal advancement of future installment amounts, artificial creation of paid-ahead status, improper interest accrual, and false delinquency indicators. 

Starting on XX/XX/XXXX, Wells Fargo began posting a series of unauthorized principal-only payment applications on dates including XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX. I did not request, direct, or authorize any payments to be applied as principal only. These classifications were applied unilaterally by Wells Fargo and were not disclosed at origination or authorized by the loan contract. 

At the same time, Wells Fargo internally advanced portions of future monthly installment amounts and attached them to later billing cycles. For example, Wells Fargo advanced {$38.00} from a future XXXX installment and applied it toward the XXXX payment, even though the XXXX payment was not yet due as of XX/XX/XXXX. This advancement was not the result of any payment I made and was not authorized by me. It was a servicer-generated internal reallocation. 

These servicer-generated advancements were then used to artificially manufacture three months paid ahead status, after which Wells Fargo automatically converted subsequent payments to principal-only. This practice is not disclosed or authorized in the loan contract, was never agreed to, and materially altered how payments were applied and how interest accrued. 

As a result of these practices, Wells Fargo marked the account as past due on two separate occasions, despite the account being paid ahead : The first occurrence involved a past-due designation for over {$40.00}, even though sufficient payments had already been made. 

The second occurrence occurred after the unauthorized principal-only reclassifications and internal advancement of future installments described above. 

On a prior occasion, Wells Fargo marked the account past due while simultaneously treating it as paid ahead and collected three days of interest on a {$50.00} payment, demonstrating improper interest accrual directly caused by payment misapplication. An account can not logically be both paid ahead and past due absent servicing errors or manipulation. 

These false past-due designations caused additional harm beyond improper interest accrual. Being incorrectly marked past due created undue stress and concern that Wells Fargo could pursue collection activity or an unlawful repossession based on inaccurate account information. Because this past-due indicator occurred more than once and was not corrected after escalation, the risk of wrongful enforcement action was reasonable and foreseeable. 

I escalated these issues to Wells Fargo. They refused to provide any corrective resolution, refused to reverse the misapplied payments, and refused to correct the false past-due designations. Wells Fargo stated only that they apply payments in any order as allowed by law. This explanation is false and misleading. The loan contract does not authorize the practices described, and Wells Fargo has not identified any law that permits unilateral reclassification of payments, servicer-generated advancement of future installments, or reliance on non-contractual statement language to alter payment application. 

Wells Fargo relies on language printed on the back of monthly statements stating that once an account is paid ahead three months, payments will be applied to principal only. This language does not appear in the loan contract, was not disclosed at origination, and can not amend or override a signed retail installment agreement. 

These practices have occurred more than once, appear systemic, and have resulted in unauthorized payment application, improper interest accrual, false delinquency indicators, foreseeable risk of wrongful enforcement action, and Wells Fargos refusal to remediate after escalation.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation