Wells Fargo & Co. will pay $110 million to settle several class action lawsuits brought in the wake of its mass unauthorized account scam, it announced in a statement.
“This agreement is another step in our journey to make things right with customers and rebuild trust,” said Wells Fargo CEO Tim Sloan in a statement. “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.”
A dozen class action lawsuits were filed against Wells Fargo after it was disclosed in 2016 that employees at the financial institution created almost 2 million unauthorized customer accounts to generate millions in fees that profited the company.
The $110 million will be set aside for customer remediation, and will be used to pay customers for out-of-pocket losses, such as fees incurred due to unauthorized account openings, as well as for attorneys’ fees and administrative costs.
“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,” according to the Wells Fargo statement.
A court must still approve the settlement agreement before funds can be distributed.
This settlement is the second major settlement Wells Fargo has agreed to related to the scandal. In September 2016, the financial institution agreed to pay $190 million to settle claims brought by government agencies, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles, The National Law Journal reports.
“Only $5 million of the payment went to customers, who are the class members in the lawsuits against Wells Fargo,” according to the journal.
For more on the Wells Fargo scam and fraud trends at financial institutions, read Security Management’s March cover story "Teller Trouble."