Wells Fargo Beefs Up Settlement To Appease More Customers

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Robert Donachie Capitol Hill and Health Care Reporter
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Wells Fargo announced Friday it will expand its class action settlement relating to illegal sales practices to include customers who opened up accounts with the bank as early as 2002, Reuters reports.

The bank said it would provide an additional $32 million on top of the previously agreed upon $110 million settlement struck in March.

Wells Fargo says the entire sum will be used to cover “all persons” who can prove that the bank, without their consent, opened up an account, applied for a credit card, or enrolled them in a service. The coverage period of the original settlement was January 1, 2009, but bank officials moved the date back Friday to May 2002.

A court still has to sign off on the settlement, so customers who believe they were impacted will have to wait to take action. The amount each customer will receive from the settlement is still unclear, as it is still too early to discern how many will be included until the court gives its approval.

Wells has already paid out $3.2 million to customers for over 130,000 potentially unauthorized accounts. Essentially, every customer got around $25.

The expansion of this agreement is another important step to make things right for our customers,” Wells Fargo CEO Tim Sloan told reporters.

Wells Fargo landed in hot water in September, 2016, when it was uncovered that the bank was participating in illegal retail lending practices.

Bank employees issued 565,000 lines of credit and opened 1.5 million bank accounts for customers without their consent from 2011-2014, and sometimes created false email addresses to sign them up for banking services in order to pad their numbers. Some 14,000 of those credit accounts accrued over $400,000 in fees alone. (RELATED: DOJ Demands Wells Fargo Whistleblower Testify In Formal Investigation)

Initially, Wells was slapped by the Consumer Financial Protections Bureau (CFPB) with a $185 million fine— the largest ever levied by the federal agency — after finding these practices were rampant throughout Wells Fargo since 2011. (RELATED: CFPB Fines Wells Fargo $185 Million For Opening Fake Accounts)

Former Chairman and CEO of Wells Fargo John Stumpf faced congressional investigation, which ultimately led Wells’ board to force the executive to cough up $41 million in assets and earnings he accrued from his decades-long tenure. The move, however, proved not harsh enough for members of Congress and the public. Stumpf announced he was stepping down as chairman and CEO Oct. 12, 2016.

The new CEO of Wells Fargo, Tim Sloan, took over for Stumpf in December, 2016.

Wells has been on a campaign to regain consumer trust and confidence, even going so far as to directly contact those hurt by the sales scandal. The bank has made almost 200,000 calls to customers since news broke about the scandal in August, with only about one-fifth have responded. (RELATED: Wells On Quest To Make Good After Sales Scandal)

Wells has taken other more direct measures at the company itself, including firing over 5,000 employees and changing compensation packages for employees.

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