A federal court has finally given final approval to Wells Fargo’s $142 million class action settlement for the bank’s customers who had a fake account opened in their name.
The final approval comes nearly a year after the settlement received preliminary approval by the judge overseeing the lawsuit, and more than a year after the settlement was first announced.
In March 2017, Wells Fargo announced that it agreed to a $110 million settlement in the lawsuit, before increasing the settlement from $110 million to $142 million to cover anyone who had a fake account opened in their name stretching back to 2002.
In May of last year, the judge warned that Wells Fargo’s proposed $142 million settlement may not be enough money to compensate all the victims and asked that Wells Fargo guarantee that all of those affected customers would be fully compensated.
Wells Fargo followed the judge’s request and guaranteed that all of the affected customers would be repaid in full and fully compensated for any damage done to their financial records and credit scores.
Then, in July 2017, the settlement was approved on a preliminary basis but it’s taken nearly a year for the settlement to work to a final approval.
The bank announced Friday that the settlement is now final and payment to the affected customers should begin soon.
The settlement class consists of all people who claim that Wells Fargo opened a consumer or small business checking or savings account or an unsecured credit card or line of credit without their consent from May 1, 2002 to April 20, 2017.
Also included in the settlement are customers who may have been enrolled in identity theft protection services without their knowledge or consent.
Wells Fargo customers have until July 7, 2018 to sign up to be part of the settlement. That deadline was extended earlier this year. Initially, the deadline had been set for Feb. 3, 2018 but was extended to allow more affected customers to take part in the settlement.
The settlement stems from legal actions that were brought against the bank in the wake of the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles fining Wells Fargo $150 million for more than 5,000 of the bank’s former employees opening as many as 2 million fake accounts in order to get sales bonuses.
The fine led to this class action lawsuit brought on behalf of the bank’s customers who had a fake account opened in their name. But that wasn’t the only settlement Wells Fargo agreed to in the wake of the fake account scandal.
Last month, Wells Fargo reached a $480 million settlement with a group of shareholders who accused the bank of making “certain misstatements and omissions” in the company’s disclosures about its sales practices.
That settlement will see shareholders get their money, and now, the people who were the victims of the fake accounts are going to get their money too.
“The court’s approval of the broad and far-reaching $142 million settlement agreement is a significant step forward in making things right for our customers and further restoring trust with all of Wells Fargo’s stakeholders,” Tim Sloan, Wells Fargo’s president and CEO, said. “We are pleased with this decision as it supports our efforts to help customers impacted by improper retail sales practices and ensures they have every opportunity for remediation.”