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- White House Now Doesn’t Dispute Details of Trump's Call with Army Widow
- Goldman Sachs’ Lloyd Blankfein Just Threw Some Serious Brexit Shade
- Guggenheim Partners ‘Bank Wrecker’ Could Get $100Mn Exit Package
- Proposed Arbitration Rule Change: For Customers Dealing with an Inactive Firm or Associated Person
- This Family Bet It All on Bitcoin
- Clearinghouses Pass CFTC Liquidity Stress Tests
- President Trump Admits He’s Trying to Kill Obamacare. That’s Illegal.
- Trump Plunges Down List of ‘America’s Richest’
- Is Trump’s “Foreclosure King” in Over His Head?
- FBI Arrests NCAA Basketball Coaches and Adidas Rep in Bribery Probe Involving Recruitment
- Equifax CEO Steps Down Amid Hacking Scandal
- Litigation Costs to Rub Salt in RBS Investor Wounds
- RIAs Poised to Land Wirehouse Recruits - Dan Jamieson
- Citibank and U.K. Affiliate to Pay $550K Penalty for Swap Data Reporting Violations - CFTC
- AIG to Restructure into 3 New Units, Marking CEO's First Big Move
- Accounting Firm Deloitte Says It Suffered Cyberattack (subsc reqd)
- Upcoming FINRA Board Meeting and FINRA360 Update
- Elizabeth Warren Lifts Hold on Trump DOJ Antitrust Nominee
- Bigger Mergers Narrow Indy Reps' Options, Alter IBD Channel - Dan Jamieson
- Dentons to Merge with U.K.'s Murray & Spens
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NEWSLETTERS & ALERTS
Wells Fargo’s $110Mn Class Action Settlement – Does This Sound Cheap?
Wells Fargo announced that it has agreed to pay $110 million (after attorneys’ fees) to settle a class-action lawsuit relating to the 2 million or so accounts that bank employees opened without customer permission, going back to 2009. Under terms of the settlement, Wells Fargo would also waive its right to take customers into ‘third-party’ arbitration. This settlement, which is subject to court approval, would apparently resolve 11 other pending class-action lawsuits filed against Wells Fargo in this matter.
It’s the first private settlement that Wells Fargo has reached since September 2016, when the bank agreed to pay $185 million in fines to settle to charges filed by federal and California authorities. And then there’s $3.2 million in payments that tge babnk has already made customers who reportedly had 130,000 accounts opened without their permission. In most cases, these customers (who received a remediation check) will be eligible to take part in the $110million settlement.
“We want to ensure that each customer impacted by our sales practices issue has every opportunity for remediation, and this agreement presents an additional option. We continue to encourage customers to contact us directly so that we can act quickly to refund fees and address any concerns.” - - Wells Fargo CEO Tim Sloan, in a statement.
HOW DOES THE SETTLEMENT BENEFIT CUSTOMERS? A lawyer with Keller Rohrback, one of the firms that filed the class-action suit against Wells Fargo praised the settlement: “We believe this is an outstanding result obtained for the benefit of a proposed nationwide class, notwithstanding Wells Fargo’s effort to block the class action with an arbitration clause.”
Really? The numbers on the table seem rather low for remediation to customers- at least to this layman’s eyes. Let’s work out the numbers: $110Mn among 2,000,000 accounts equals $55 per account; $3.2Mn payouts for 130,000 accounts equals $25 per account.
How might that begin to compensate customers who have endured credit rating problems, or customers who worried needlessly and spent untold hours to process account closures?
Of course, the bank faces additional legal obstacles –regulatory and criminal investigations, and lawsuits by investors and former employees. All these may result in significantly higher payments by the bank. But of course, they would not necessarily end up in the pockets of customers – who, along with fired employees, have borne the greatest losses in the entire scandal.
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