Wells Fargo to Pay $110 Million to Settle Unauthorized Accounts Lawsuit
The bank has been embroiled since last year in a scandal that ultimately cost the CEO his job
Wells Fargo has agreed to a $110 million settlement of a lawsuit filed over the bank's illegal practice of opening accounts without customer consent in order to meet sales quotas, reports Reuters.
The result was a scandal that led to numerous Wells employees losing their jobs, including former CEO John Stumpf.
The bank stated that it expects this settlement to resolve claims in 11 addition pending lawsuits and to cover claims dating back to January 1, 2009. The settlement has not yet been approved by a court.
The Los Angeles Times (LAT) writes that Wells has so far refunded the holders of roughly 130,000 accounts to date, though it is unclear how many individual customers are represented by that number.
The bank will reimburse claimants for any wrong fees after attorney's fees and administrative costs are paid, reports Reuters. The amount left over after those costs will be distributed based on the number and types of unauthorized accounts or services claimed.
The lawsuits claimed that Wells's high-pressure sales culture compelled branch workers to open unauthorized accounts—including forging signatures—in order to meet sales quotas. Affected customers claimed that this left them with accounts they neither needed nor wanted, as well as fees they didn't know about.
In a statement, new Wells Fargo Chief Executive Officer Tim Sloan commented that the settlement "is another step in our journey to make things right with customers and rebuild trust."