Wells Fargo Will Pay $110M to Settle Fake Bank Accounts Class Action Lawsuits

Plaintiffs in 12 separate Wells Fargo class action lawsuits will benefit from a recent settlement worth $110 million.

The settlement, reached in a single Wells Fargo class action lawsuit brought by plaintiff Shahriar Jabbari, applies equally to claims raised in 11 other actions.

Plaintiffs from several different states accuse Wells Fargo of signing them up for bank accounts they didn’t want and in many cases never even knew about.

Jabbari initiated his Wells Fargo class action lawsuit in May 2015. He accused the bank of instituting extreme sales quotas on its employees, requiring them to sign customers up for more Wells Fargo products than could realistically be expected of them.

Employees who struggled to meet these quotas were allegedly told by bank managers to do “whatever it takes” to meet the required goals.

As a result of these unrealistic demands, Jabbari alleged, Wells Fargo employees desperate to meet their quotas began signing up existing customers for accounts and other services without their knowledge or consent.

The pressure of these sales quotas also drove Wells Fargo employees to misrepresent material facts about the bank’s products, in an effort to compel customers to sign up for products they didn’t necessarily want or need, Jabbari claimed.

He said the bank knew about these fraudulent practices for years, yet failed to properly address it.

An investigation by the Consumer Financial Protection Bureau revealed that this practice resulted in the opening of around 1.5 million fake Wells Fargo accounts and the issuance of about 565,000 credit cards, all without customers’ knowledge.

The Bureau slapped Wells Fargo with $185 million in civil penalties as a result of that investigation. Other regulatory investigations continue, however.

So far, about 5,300 Wells Fargo employees have lost their jobs, including four senior managers who were fired in February 2017 by the bank’s board of directors. Former chairman and CEO John G. Stumpf tendered his resignation in October 2016, giving up millions in unvested stock.

Wells Fargo’s mass creation of fake accounts  is still under investigation by the Securities and Exchange Commission and several different U.S. attorneys’ offices.

Under the terms of the Wells Fargo class action settlement, the $110 million settlement fund is prioritized to compensate Class Members for out-of-pocket losses traceable to the alleged unauthorized accounts, as well as costs and attorneys’ fees.

Any remaining settlement funds will be distributed among Class Members according to the number and types of allegedly unauthorized services they were subject to.

The proposed settlement Class will cover all persons who without their consent were enrolled in a Wells Fargo service or in whose name Wells Fargo opened an account or submitted an application for services between Jan. 1, 2009 and the date the settlement is executed.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

Jabbari is represented by attorneys Derek W. Loeser, Gretchen Freeman Cappio, Daniel P. Mensher and Matthew J. Preusch of Keller Rohrback LLP.

The Wells Fargo Sales Quota Class Action Lawsuit is Jabbari v. Wells Fargo & Company, et al., Case No. 3:15-cv-02159, in the U.S. District Court for the Northern District of California.

UPDATE: On April 21, 2017, Wells Fargo expanded the class action settlement that would resolve allegations that the bank opened millions of fake accounts, bringing the total up to $142 million.

UPDATE 2: On May 24, 2017, a federal judge says he will grant preliminary approval to the terms of a Wells Fargo class action settlement, conditional on certain changes. According to the judge, the new agreement should provide more time for settlement administration. Claimants should have more time to file claims, and the court should have more time to evaluate the work of the settlement administrator and its credit injury experts.

UPDATE 3: On July 8, 2017, the $142 million Wells Fargo class action settlement was preliminarily approved by a California federal judge. 

UPDATE 4: September 2017, the Wells Fargo unauthorized bank accounts class action settlement’s website has been established. Click here to learn more about what the settlement provides to Class Members. 

UPDATE 5: On May 30, 2018, a California federal judge granted final approval for a $142 million class action settlement over claims that Wells Fargo opened fake bank accounts, despite many arguments that the settlement is insufficient.