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.
Next Steps
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.