Wells Fargo to pay $110 million to settle lawsuit over account abuses

Tue Mar 28, 2017 6:18pm EDT
 
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(Reuters) - Wells Fargo & Co (WFC.N: Quote) said it agreed to pay $110 million to settle a lawsuit by customers challenging its opening of accounts without their permission, a practice that led to a scandal that cost the bank's chief executive his job.

The bank said on Tuesday it expects the settlement to resolve claims in 11 other pending class actions, and will cover claims between Jan. 1, 2009, through the date the agreement is executed.

The settlement agreement is yet to be approved by the court.

After attorneys' fees and costs of administration, claimants will be reimbursed for any wrong fees, Wells Fargo said on Tuesday.

The remaining amount will be distributed to the claimants, based on the number and kinds of unauthorized accounts or services claimed, the bank said.

The lawsuit resolves claims that Wells Fargo's high-pressure culture drove branch workers needing to meet sales quotas to open unauthorized accounts, including with forged signatures.

Customers said this saddled them with accounts they did not need or want, and fees they knew nothing about.

The lawsuit dates from May 2015, sixteen months before Wells Fargo agreed to pay $185 million in penalties to settle regulatory charges over the sham accounts, estimated to number as many as 2 million.

That settlement with the U.S. Consumer Financial Protection Bureau and Los Angeles City Attorney Mike Feuer prompted national outrage, leading to the departure in October of the bank's longtime chief executive, John Stumpf.   Continued...

 
The sign outside the Wells Fargo & Co. bank in downtown Denver April 13, 2016.  REUTERS/Rick Wilking