Magazine article American Banker

Wells Fargo Adds Cash, Additional Years to Class-Action Settlement

Magazine article American Banker

Wells Fargo Adds Cash, Additional Years to Class-Action Settlement

Article excerpt

Byline: Kevin Wack

Wells Fargo is adding $32 million to a previously announced consumer class-action settlement, and also extending the deal to cover phony customer accounts opened as early as 2002.

The original agreement with customers who were enrolled in accounts without their consent was announced on March 28. It initially included $110 million for customer remediation, and covered accounts opened as early as Jan. 1, 2009.

But then on April 10, a special committee of Wells Fargo's board of directors released a 110-page report on the roots of the sales scandal. The report found a pattern of employee misconduct dating back well over a decade.

For example, it cited an internal company memo from 2004 that projected 223 employees would be fired that year for misconduct.

The $190 million settlement that Wells Fargo reached with the authorities last fall was based on findings about the bank's conduct between 2011 and 2015.

In a press release Friday, the $1.9 trillion-asset bank said that the revised settlement agreement takes into account findings from the board's report. Under the expanded agreement, which has yet to be approved by a federal judge, $142 million would be made available to compensate customers.

Customers who were charged fees in connection with unauthorized accounts between 2009 and 2017 would be eligible for reimbursement, while those who were charged such fees between May 2002 and 2008 would receive a payment based on the average of fees paid on claims from the later period, the San Francisco-based bank said. …

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