Wells Fargo Reaches $110 Million Class-Action Settlement -- Update
March 28 2017 - 10:14PM
Dow Jones News
By Maria Armental
Wells Fargo & Co. has reached a $110 million tentative
agreement to resolve a class-action complaint over allegations that
some of its employees opened accounts and pushed services without
customers' consent or approval.
If approved by the court, it would be the first private-party
settlement and it would cover customers starting in Jan. 1, 2009.
The San Francisco bank says the proposed settlement could resolve
11 related cases.
Most noticeably, Wells Fargo agreed not to invoke contracts'
arbitration clauses, one of the issues on which legislators had
zeroed in as the retails-sales scandal unfolded.
Wells Fargo had sought to use the arbitration clauses, common in
financial products and services, to block customers from suing for
damages related to the unauthorized accounts and services, such as
lower credit scores or higher borrowing costs.
"This agreement is another step in our journey to make things
right with customers and rebuild trust," Chief Executive Officer
Tim Sloan said in a prepared statement.
The proposed $110 million payout would be on top of the $185
million the bank had to pay after regulators found "widespread
illegal" sales practices starting in 2011.
Wells Fargo -- which Tuesday said it had already set aside the
money for the proposed settlement -- is still trying to determine
how many people were affected and how they should be
compensated.
The retail-sales scandal, which put the bank in the crosshairs
of congressional leaders and banking regulators, has cost the bank
significant business and led to the resignation of chairman and
chief executive John Stumpf.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
March 28, 2017 21:59 ET (01:59 GMT)
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