The Seattle law firm Keller Rohrback filed a lawsuit two years ago alleging that Wells Fargo workers – under pressure to meet unrealistic sales goals – opened checking, savings and credit card accounts without customer authorization. At the time, regulators report that an estimated 2.1 million unauthorized accounts. The regulators based their numbers on a Wells Fargo’s analysis of accounts opened and applications submitted between May 2011 and July 2015, according to the Los Angeles Times.
Late Thursday the attorneys, who are negotiating a class-action settlement, suggested in a new filing that the actual number may be 3.5 million accounts. The increased number of accounts is based on a recent bank audit. The audit found that 2002 was when Wells Fargo executives first noticed that employees were opening accounts without customer authorization.
— Bloomberg (@business) May 12, 2017
In March, Wells Fargo agreed to a settlement of $110 million for unauthorized accounts opened as far back as 2009. Based on the new audit, Wells Fargo agreed to push the class-action back to 2002 and increase the settlement amount to $142 million.
Tim Sloan, the bank’s chief executive, said expanding the settlement to $142 million was “an important step to make things right for our customers.”
Ed Mierzwinski, consumer program director at the US Public Interest Research Group, said the number is probably larger. He encouraged regulators and attorneys to continue to investigate the bank’s practices.
“We need to keep Wells Fargo’s feet to the fire,” he said. “We don’t know everything yet. It’s like peeling open an onion — the depths of the Wells Fargo corruption and its abuse of its customers and front-line workers.”
If approved, the settlement would apply to Wells Fargo customers nationwide and likely pull multiple class-actions into a single suit.
The settlement uses different formulas for payments dependent on how customers were affected by the unauthorized accounts. Customers charged fees would get refunds.
Customers who had their credit harmed – through unwanted credit inquiries or hidden fees – would be reimbursed for their added costs. However the agreement requires customers to demonstrate that their credit was damaged, and that it resulted in a loan at a higher interest rate to be eligible for repayment.
Leftover settlement funds would be split among the eligible customers determined by the number of unauthorized accounts in their name.