SAN FRANCISCO--(EON: Enhanced Online News)--Wells Fargo announced today that it has reached an agreement in principle to settle a class action lawsuit concerning retail sales practices, which was filed in May 2015 in the Northern District of California (Jabbari v. Wells Fargo, N.A., et al.). 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.
“This agreement is another step in our journey to make things right with customers and rebuild trust,” said Tim Sloan, Wells Fargo’s President and Chief Executive Officer. “We want to ensure that each customer impacted by our sales practices issue has every opportunity for remediation, and this agreement presents an additional option. We continue to encourage customers to contact us directly so that we can act quickly to refund fees and address any concerns.”
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.
Ongoing Remediation Efforts Continue
This settlement is in addition to the remediation amounts previously paid under the stipulated judgment with the Los Angeles City Attorney and the fees paid under the CFPB and OCC consent orders, covering the period 2011 - 2016. Wells Fargo is continuing to work to make things right with customers who were impacted by sales practices issues, including its own voluntary review of accounts from 2009 – 2010 to determine and remediate any customer harm. It will also continue its nationwide mediation program to address customer concerns. Customers should contact Wells Fargo directly if they believe they had an unauthorized account or service opened in their name, by visiting a branch or calling 1-877-924-8697.
The settlement agreement must be approved by the court. If the court grants preliminary approval of the settlement agreement, a notice will be issued providing information concerning the process for making claims, and customers who believe they should be included in this suit will be able to submit claims. The court also will need to grant final approval of the settlement before payments will be made to class members. In the meantime, customers do not need to take any action to be included in the class subject to this agreement; however, as always, they are encouraged to contact Wells Fargo to discuss any account issues.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories to support customers who conduct business in the global economy. With approximately 269,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our future financial performance and business. Because forward-looking statements are based on our current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.