Judge: Wells Fargo $142 million fake account settlement may not be enough

Asked to guarantee affected customers will be repaid fully

Wells Fargo’s proposed $142 million settlement in the class action lawsuit brought on behalf of the bank’s customers who had a fake account opened in their name is moving closer to being finalized, but the judge overseeing the settlement cautioned the bank that $142 million may not be enough money to compensate all the affected customers.

Last month, Wells Fargo announced that it increased its proposed settlement from $110 million to $142 million to cover now covers anyone who had a fake account opened in their name from 2002 until recently.

But, according to the Los Angeles Times, the judge in the lawsuit is not ready to give the final seal of approval quite yet because he’s concerned that the settlement may not be big enough.

Here’s the Los Angeles Times with more details:

A federal judge in San Francisco said late Wednesday that he would approve a settlement deal reached by the bank and plaintiffs’ attorneys, but only if they agree to several conditions — including a guarantee that all customers will be fully compensated for their losses.

That could further boost the amount the bank will have to pay to put the lawsuits behind it as questions remain about how many customers were harmed and how much money they lost.

At a hearing last week, U.S. District Judge Vince Chhabria had said the proposed sum — while potentially more than enough — still could fall short and leave customers in the lurch.

“If Wells Fargo wants to make things right, what about a full compensation guarantee?” Chhabria asked Wells Fargo’s attorneys during the hearing.

According to the LA Times article, the judge laid out a series of conditions for Wells Fargo and the plaintiffs to review to ensure that all customers are properly compensated.

The two sides have two weeks to review the judge’s proposal.

For much more from the Los Angeles Times, click here or below.

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