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Wells Fargo agrees to class-action settlement over its sales practices

Wells Fargo
Banking   A class action lawsuit

Wells Fargo has reached an agreement in principle to settle a class action lawsuit concerning retail sales practices.


The settlement class will consist of all persons 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 consent during the period from January 1, 2009, through the date the Settlement Agreement is executed.

Wells Fargo expects this settlement to resolve claims in 11 other pending class actions that unauthorized accounts were opened in customers’ names or that customers were enrolled in products or services without their consent.

The settlement amount of $110 million will be set aside for customer remediation. After attorneys’ fees and costs of administration, class members will be paid first for out-of-pocket losses, such as fees incurred due to unauthorized account openings.

Amounts remaining after out-of-pocket losses will be split among all claimants, based on the number and kinds of unauthorized accounts or services claimed.

The two sides disputed the applicability of the arbitration agreement contained in Wells Fargo’s deposit agreements. In order to move forward and avoid continued litigation, Wells Fargo agreed to this settlement notwithstanding the arbitration clause.

Wells Fargo had fully accrued for the amount of this settlement at December 31, 2016.

 

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