Wells Fargo Announces Agreement in Principle to Settle Class Action Lawsuit Regarding Retail Sales Practices
March 28 2017 - 04:59PM
Business Wire
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170328006505/en/
Wells Fargo & CompanyMedia contactsJim Seitz,
612-316-2447jim.seitz@wellsfargo.comorMary Eshet,
704-383-7777Mary.eshet@wellsfargo.comInvestor RelationsJim
Rowe, 415-396-8216Jim.rowe@wellsfargo.com
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