Judge Approves $142M Wells Fargo Fake Bank Accounts Settlement

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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.

This week, U.S. District Judge Vince Chhabria stated that he would approve the $142 million settlement that had been reached between Wells Fargo and consumers that claimed the bank opened fake accounts in their names to gain profits on fees between May 2002 and April 2017.

Judge Chhabria noted that he felt that the deal was far from perfect, and that it represented “the least-worst solution” to the dispute.

Strong criticism about the settlement amount and reliability of information on the extent of alleged damage done came from a number of objectors.

One of the lawyers representing several objectors claimed that the $142 million figure fell far short of what should have been awarded — he states that had the case gone to trial, a jury might have awarded as much as $600 million to accountholders.

The objectors’ attorney went on to state that as the litigation proceeded, an additional 1 million fraudulent accounts had been uncovered, which brought the final Class size up to 3.5 million consumers, and could subsequently bring the amount a jury might have awarded up to $1 billion.

Another lawyer representing settlement objectors stated that he felt that this case should have been a multidistrict litigation as opposed to a class action lawsuit, which would have allowed for a wider variety of claims.

He went on to say that the Wells Fargo class action settlement was insufficient because Wells Fargo had allegedly held “overnight shredding parties” on the fraudulent accounts, thus destroying evidence of much of their wrongdoing. He states that this meant that the Class size could not be properly determined.

Representation for the Class of Wells Fargo accountholders was less critical of the deal. One of the Class Counsel attorneys stated that with the terms of the settlement and the amount, “people will receive make-whole relief,” and that “they’ll get back every bit of economic harm.” Overall, he said that the settlement repressed an “unprecedented uncapped guarantee.”

Wells Fargo, in contrast, expressed support of the settlement calling it a “step forward” in their efforts to make things right with their customers and stakeholders. An attorney representing Wells Fargo said he appreciated the “great interest” the judge had shown throughout the case, and stated that he’d like to see the deal go through as quickly as possible.

Judge Chhabria acknowledged the extensive criticism waged at the settlement deal, but nonetheless approved the deal. He stated that “class action settlements are to a degree rough justice, but I do believe this settlement is fair and reflects a conscientious effort on behalf of the defendants and plaintiffs’ counsel.”

The Wells Fargo unauthorized accounts class action settlement is accepting claims until July 7, 2018. 

The Wells Fargo accountholders are represented by Derek W. Loeser and Gretchen Freeman Cappio of Keller Rohrback LLP.

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