Wells Fargo Unauthorized Accounts

Jabbari, et. al. v. Wells Fargo & Company and Wells Fargo Bank, N.A. 
United States District Court for the Northern District of California
Case No. 3:15-cv-02159-VC

Settlement Status

On May 30, 2018, Judge Chhabria, of the United States District Court for the Northern District of California, orally granted final approval to a nationwide $142 million settlement regarding unauthorized Wells Fargo accounts, noting that the “settlement is fair and reflects a conscientious effort on the part of both plaintiffs’ counsel and defense counsel to come up with . . . the best possible solution.” The Court subsequently issued a formal written order granting final approval of the settlement on June 14, 2018.

The settlement includes a first-of-its-kind mechanism to repay Wells Fargo victims for increased borrowing costs incurred because of a change to their credit score, together with credit repair services to reverse the harm itself. Wells Fargo customers who believe an unauthorized account was opened in their name have until July 7, 2018 to file a claim.

Under the settlement, class members with valid claims would be entitled to three types of compensation:

  • First, class members would be refunded any fees charged to unauthorized accounts that have not already been refunded.
  • Second, for class members who claim damage to their credit caused by unauthorized accounts, they would receive payment for the added cost of borrowing money attributable to the unauthorized accounts. For an example of how those borrowing costs are calculated click here.
  • Third, after fees and credit damages are paid, any money remaining in the settlement fund will be divided among claimants on a per account basis.

To find out more about the settlement, and to view Court filed documents, including information about how to file a claim, please go to the official settlement website www.WFSettlement.com.

The class covered by the settlement consists of people for whom Wells Fargo opened a consumer or small business checking or savings account, an unsecured credit card, or an unsecured line of credit, or submitted an application for one of these, without the customer’s consent during the period from May 1, 2002 through April 20, 2017. The class also consists of people who obtained Wells Fargo’s Identity Theft Protection Services during the same time period.

Notice describing the settlement was sent to class members beginning in the fall of 2017. But, for any Wells Fargo customers who think they may have had an unauthorized account opened in their name, there is still time to file a claim. The deadline to file claims is July 7, 2018. We also urge you to visit the settlement website at www.WFSettlement.com periodically, as it will be updated as the settlement progresses.

Case Overview

On May 13, 2015, Keller Rohrback L.L.P. filed a class action lawsuit against Wells Fargo (NYSE: WFC) alleging the bank victimized its customers by using illegal, fraudulent, and deceptive tactics to boost sales of its banking and financial products.

The complaint, filed on behalf of a California consumer and other Wells Fargo customers nationwide, included detailed allegations about Wells Fargo’s “gaming” of customers, including inside information from a current Wells Fargo employee who saw bank employees open unauthorized accounts on a “nearly daily basis.”

On July 30, 2015, the Plaintiff’s filed their Consolidated Amended Complaint with the Court.

On September 23, 2015, the district court in California, overseeing the proposed class action case, granted Wells Fargo’s request to force the plaintiffs to arbitrate their claims. Plaintiffs appealed that decision to the Court of Appeals for the Ninth Circuit on October 20, 2015.

While the appeal was pending, the parties began settlement discussions. After many months of hard-fought negotiations, with the assistance of a neutral mediator, retired federal judge, Layn R. Phillips, the parties reached an agreement and a settlement was achieved.

On September 8, 2016, the parties notified the Ninth Circuit Court of Appeals that they had reached a settlement, and they asked the appellate court to send the case back to the California district court so the parties could seek approval of their settlement. The district court granted its preliminary approval on July 8, 2017 and on May 30, 2018, Judge Chhabria, of the United States District Court for the Northern District of California, orally granted final approval and subsequently issued a formal written order granting final approval of the settlement on June 14, 2018.

 

Other Information

In September 2016, the Los Angeles City Attorney and federal regulators announced the resolution of their separate enforcement actions related to the same or similar alleged activity. The agencies announced Wells Fargo has agreed to pay $185 million in penalties to resolve the agencies’ claims. Additional information about those settlements is available here and here.

To find out more about the settlement, including how to register as a class member, please go to the official settlement website www.WFSettlement.com.

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