Wells Fargo agrees to fully compensate all victims of fake-account scandal

by Ryan Smith19 Jun 2017
Wells Fargo has announced that it will guarantee that any customers harmed in the bank’s fake-accounts scandal will be fully compensated, according to a Los Angeles Times report.

The bank has guaranteed that customers affected by its practice of opening unauthorized accounts will get back any fees and be compensated for any damaged done to their credit ratings. That could mean that Wells Fargo will end up owing much more than the $142 million it had previously agreed to pay to settle lawsuits over the scandal.

Last month, a federal judge told the bank that the $142 settlement amount might not be enough to undo the damage wrought by the scandal, and that he wouldn’t approve a settlement without a guarantee that affected customers would be fully compensated. While $142 million may be more than enough to do that, the final figure may not be known for months, the Times reported.

A Wells Fargo spokesman said that the bank doesn’t expect the payout to exceed the bank’s previous settlement offer.

“While we believe $142 million will adequately compensate customers, and there will be no need to add additional funds to the settlement, this agreement reflects our commitment to make things right for our customers,” spokesman Jim Seitz told the Times.

The agreement comes as Wells Fargo deals with its newest scandal – allegations that it made unauthorized changes to the terms of customers’ mortgages. Several lawsuits are accusing the bank of making changes to the mortgages of customers in bankruptcy – changes that drastically extended their loan terms and increased the total amount they owed. The bank has issued a vigorous denial of the allegations.

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