New revelations could endanger Wells Fargo’s $142 million settlement

by Ryan Smith05 Sep 2017
Wells Fargo’s revalation Thursday that it may have grossly understated the number of phony accounts its employees opened could jeopardize a $142 million class-action settlement with its customers.

The settlement amount won preliminary approval from a judge in July. However, the judge said that “further scrutiny” would be required to make sure the amount was sufficient for the number of affected customers, Bloomberg reported.

The bank’s recent revelation, that the number of fake accounts it previously estimated at 2.1 million was actually at least 3.5 million – could sink that agreement.  Steve Christiensen, a lawyer for some of the plaintiffs in the class-action case, said the number of other scandals the bank has been linked to lately make it untrustworthy.

“Wells Fargo is not going to roll over and give up its real numbers, and their admission that they had more fake accounts all along just confirms that,” Christiensen told Bloomberg. “Until a court comels Wells Fargo to turn it all over, we’ll never know what really happened.”

Attorneys are already preparing written objections to the settlement, Bloomberg reported.
Wells Fargo discovered the additional fake accounts during an internal review. The bank’s CEO, Tim Sloan, said the existing settlement should also cover those accounts since the settlement covers customers “back to 2002.”

The settlement could still win final approval from US District Judge Vince Chhabria in January, Bloomberg reported. If approved, it would cover reimbursement of fees, credit-damage relief and cash compensation.

Related stories:
Wells Fargo’s fake-account scandal may be much bigger than originally thought
Wells Fargo cheated mortgage borrowers with extra fees, lawsuits claim

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