The settlement orders compensation for customers whose credit scores dropped because of a fake account; eligible participants must have opened a credit account with any lender between May 1, 2002 and April 20, 2017.
Customer payments have yet to be specified, but will depend on “how much the credit score declined, the type and size of the subsequent authorized credit product, and other factors,” according to Wells Fargo. Customers will be notified over the next three months with details on how to start a claim.
The bank may ultimately be forced to pay out more than $142 million, in which case it will contribute additional funds to the settlement, the bank said.
To meet aggressive sales quotas, Wells Fargo bank employees opened millions of credit, checking and savings accounts without customers’ permission, according to the class action. The scandal has dogged the company for years and led to a top-tier management shake-up.
In a legal filing, plaintiffs’ attorneys in the lawsuit said: “Based on public information, negotiations, and confirmatory discovery, the parties estimate the number of unauthorized accounts for the period 2002-2017 is approximately 3.5 million. This number may well be over-inclusive, but provides a reasonable basis on which to estimate a maximum recovery.”
The settlement in the case, which is being handled in the U.S. District Court, Northern District of California, was approved on Saturday.
Wells Fargo still faces 10 other class action lawsuits and multiple investigations into the fake account practices. However, the settlement will “resolve substantially all claims” in the other pending actions, the bank said.
Source: CNN Money