Wells Fargo adds $32 million to fake-account settlement

by Ryan Smith25 Apr 2017
Wells Fargo will pay an additional $32 million in the class-action settlement over its fake-accounts scandal, the bank has announced.

Wells Fargo announced last month that it would pay $110 million to settle with customers who were affected by the scandal, in which bank employees opened 2 million customer accounts without authorization. The updated settlement of $142 million will include any customers who were “impacted” by Wells Fargo’s sales practices as early as May 2002, according to an announcement from the bank.

“The expansion of this agreement is another important step to make things right for our customers,” said Tim Sloan, Wells Fargo president and CEO. “On our journey to rebuild trust, we want to ensure our customers feel confident that we have heard their concerns about retail sales practices, which includes offering them numerous opportunities for remediation. We encourage any customer with concerns or questions about their accounts to contact us.”

The updated settlement accounts for the findings of an investigation by Wells Fargo’s board of directors. “The settlement class will now consist of all customers who claim that Wells Fargo opened an account in their name without consent, enrolled them in a product or service without consent, or submitted an application for a product or service in their name without their consent during the period from May 1, 2002, through April 20, 2017,” the bank said.

Wells Fargo expects the expanded settlement account to resolve claims in 11 other pending class-action suits over the scandal. According to the bank, the settlement will provide three forms of compensation: reimbursement of fees incurred, compensation for damaged credit, and – after repayment of fees and credit impact damages – additional compensation from the bank’s Net Settlement Fund. The new settlement agreement must still be approved by the court, Wells Fargo said.

The bank has already refunded about $3.2 million to customers in connection with the scandal. It’s also conducting its own review of accounts from 2009 and 2010 to determine if any harm was caused to customers, and, if so, provide remediation.

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