Wells Fargo recently reached a $110 million deal that it hoped would close the books on a variety of class action lawsuits related to millions of fake accounts opened by Wells employees trying to game the bank’s system of sales quotas and incentives. That settlement was intended to cover affected Wells customers going back through 2009, but it’s now been expanded by $32 million to add compensation for bank accounts as far back as 2002.
This is according to the law firm representing the plaintiffs in one class action, who say the settlement offer is now valued at $142 million.
If the settlement is approved, it would compensate Wells customers who had unauthorized accounts opened in their name starting in May 2002.
“Wells Fargo abused the trust of its customers, and the proposed $142 million settlement aims to reimburse Wells Fargo customers for the damage caused by the bank’s conduct,” says Derek Loeser, an attorney for the plaintiffs.
The deal, which still requires court approval, technically only settles one class action — a lawsuit brought by a California man in 2015, more than a year before the bank admitted to the fake account fiasco. However, Wells said last month that it believes this settlement will effectively close the books on the dozen or so other pending class actions.
The bank has already paid $185 to state and federal regulators as a penalty for the debacle, which saw thousands of Wells employees dismissed, along with the “retirement” of Wells CEO John Stumpf and the exit of Carrie Tolstedt, who headed up the bank’s retail business. In addition to being pushed out the door, both execs have had significant chunks of compensation clawed back by the Wells Fargo board.
Earlier this week, the Office of the Comptroller of the Currency — one of the federal regulators with oversight of Wells Fargo — released a report on its handling of the bogus accounts, revealing that OCC investigators knew of fraud-related complaints at Wells Fargo for years but did nothing.
According to that report, by 2010 the OCC had compiled more than 700 whistleblower complaints about the bank’s bad practices, but after meeting with Tolstedt, failed to pursue the matter further.
In addition to lawsuits from customers, Wells faces allegations from employees that the bank retaliated against staffers who tried to blow the whistle on potential fraud.