- Agreement will set aside $142 million for customer remediation claims back to May 2002
- Adds to remediation options for customers
Wells Fargo & Company (NYSE: WFC) today announced updates to the
settlement agreement for a class-action lawsuit concerning improper
retail sales practices (Jabbari v. Wells Fargo & Co., et al.)
following a July 8 order from the U.S. District Court for the Northern
District of California granting preliminary approval. With the court’s
preliminary approval of the settlement agreement, Wells Fargo and the
plaintiffs are preparing to issue notices that will provide information
about the process for making claims.
“We are pleased that the court found the settlement to be fair,
reasonable and adequate. This preliminary approval is a major milestone
in our efforts to make things right for our customers,” said Tim Sloan,
Wells Fargo’s President and Chief Executive Officer. “It further ensures
each customer impacted by an improper retail sales practice has every
opportunity for remediation. This is in addition to our direct efforts
to review accounts and provide remediation. These efforts are
fundamental to restoring trust with all our stakeholders and building a
better Wells Fargo for the future.”
Wells Fargo expects this settlement to resolve substantially all claims
in 10 other pending class actions that allege unauthorized accounts were
opened in customers’ names or that customers were enrolled in products
or services without their consent.
Within the next three months, broad outreach to current and former
customers will begin, and notices will be issued to potential class
members that will provide information about the process for making
claims, and customers who believe they should be included in this
settlement will be able to submit claims. The settlement agreement is
subject to final court approval, which will be required before payments
are made to class members.
Wells Fargo offers multiple remediation options; reports progress
toward completion
The class-action settlement will add another option for customer
remediation and contributes to Wells Fargo’s ongoing work to make things
right for customers who were impacted by improper retail sales
practices. To date, our customer remediation efforts include:
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$3.26 million in remediation amounts previously paid under the
stipulated judgment with the Los Angeles City Attorney and under the
Consumer Financial Protection Bureau and Office of the Comptroller of
the Currency consent orders, covering the period May 2011 – mid-2015.
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$1.8 million in additional payments to customers nationwide, from
September 8th, 2016 to May 31st, 2017, through
Wells Fargo’s ongoing complaints process and free mediation services.
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A voluntary review of accounts from 2009 – 2010 to determine possibly
unauthorized accounts and associated harm, and providing remediation
to customers impacted by improper retail sales practices during those
two years, as well as from January 2011 to September 2016, as required
by the consent orders. Wells Fargo expects to complete the review
process and commence remaining remediation for all these additional
periods by the end of the third quarter 2017.
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Offering an avenue for customers whose credit was harmed by improper
retail sales practices to seek compensation by participating in the
class-action settlement.
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Supporting customers who believe they had an unauthorized account or
service opened in their name, regardless of when the issue occurred,
by encouraging them to visit a branch or call the company’s dedicated
hotline: 1-877-924-8697.
Settlement Agreement Details
The settlement agreement sets aside funds for a total of $142 million
for customer remediation and settlement expenses. It includes a process
to compensate customers for increased borrowing costs due to
credit-score impact associated with a potentially unauthorized account.
The process will be led by an independent expert hired by class counsel.
Compensation will be paid if a customer’s credit score dropped because
of a potentially unauthorized account and the customer opened an
authorized credit product with any lender within time periods specified
in the agreement. The payments will take into account how much the
credit score declined, the type and size of the subsequent authorized
credit product, and other factors.
In addition, the amended settlement agreement includes a provision
designed to ensure that sufficient funds are available to compensate all
claimants. In the unlikely event that the $142 million settlement total
is not enough to reimburse customers for unauthorized account fees,
compensate customers for harm to their credit, pay attorneys’ fees and
expenses, and have at least $25 million left over to distribute to all
class members, Wells Fargo will contribute additional funds to the
settlement.
The settlement class will consist of all persons who claim that Wells
Fargo opened, without their consent, a consumer or small business
checking or savings account or an unsecured credit card or line of
credit or enrolled them, under certain circumstances, in Identity Theft
Protection services, in each case between May 1, 2002 and April 20,
2017. 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.
Customers do not need to take any action at this time 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 $2.0 trillion in assets. Wells Fargo’s
vision is to satisfy our customers’ financial needs and help them
succeed financially. Founded in 1852 and headquartered in San Francisco,
Wells Fargo provides banking, insurance, investments, mortgage, and
consumer and commercial finance through more than 8,500 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 273,000 team members,
Wells Fargo serves one in three households in the United States. Wells
Fargo & Company was ranked No. 25 on Fortune’s 2017 rankings of
America’s largest corporations. 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
remediation progress and the settlement agreement, including the
expected scope of the settlement agreement and our expectations
regarding the cost to us of the settlement agreement. 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.