July 10 (UPI) — A federal judge has approved a plan for Wells Fargo & Co. to pay $142 million in a class action suit involving customers of fake accounts.
U.S. District Vince Chhabria ruled on Saturday in San Francisco the settlement was “fair, reasonable and adequate.”
Last year, Wells Fargo admitted that 2 million potentially unauthorized checking and credit card accounts were opened between 2011 and 2015. In September, federal Consumer Financial Protection Bureau fined the banking giant $185 million. Also, Wells Fargo fired more than 5,300 employees who part of the scam.
In the class action case, compensated will be customers that had improperly opened checking or savings accounts, credit cards, lines of credit or identity theft services between 2002 and April 2017. Also getting money will be customers whose credit score dropped because of a fake account.
Payments will depend on “how much the credit score declined, the type and size of the subsequent authorized credit product, and other factors,” the company said. Customers will be notified in the next three months with details on how to start a claim.
If costs surpass $142 million, the company will contribute additional funds to the settlement, it said.
First allocated from the funds will be lawyer fees and administrative costs. Then Wells Fargo customers will be paid for out-of-pocket losses. What’s left will be split among all customers, based on how many and what kind of accounts they say were opened.
The bank and plaintiff lawyers will be contacting customers in the next three weeks and the settlement might not be final in early next year.
More information is available at www.wfsettlement.com, and Wells Fargo has established a hotline at 877-924-8697.
“We are pleased that the court found the settlement to be fair, reasonable and adequate,” Wells Fargo CEO Tim Sloan said in a statement Sunday. “It further ensures each customer impacted by an improper retail sales practice has every opportunity for remediation.”
Wells Fargo still faces 10 other class action lawsuits but the settlement will “resolve substantially all claims” in the other pending class actions, it said. Investigations are also being conducted by states, other federal agencies and the Securities and Exchange Commission.
Wells Fargo is based in San Francisco but its biggest employee hub is in Charlotte, N.C.