On Tuesday, Wells Fargo announced it has reached a settlement related to opening unauthorized bank accounts. The bank agreed in principal to settle the class action lawsuit for $110 million.
The lawsuit, filed in federal court in May 2015, contains allegations by Wells customers who say the bank enrolled them in products and services without their consent. The bank estimates that up to 2 million unauthorized credit and deposit accounts were opened over several years.
The bank’s aggressive sales quotas put pressure on employees to either meet the demand by creating fake accounts or risk losing their jobs, employees say. Although thousands were fired for committing fraud, high level executives went unpunished.
The bank disclosed that it agreed to pay $185 million in regulatory fines in September 2016. Bank CEO John Stumpf was grilled by members of Congress for allowing the matter to go on for so long. Senate Banking Committee Member Elizabeth Warren told him, "You should resign...You should be criminally investigated." Stumpf retired a month later with a package valued at $134 million.
Wells said the settlement, expected to resolve claims in 11 other pending class-action suits over unauthorized accounts or product enrollments, is part of the San Francisco-based bank’s efforts to turn around its tarnished image.
“This agreement is another step in our journey to make things right with customers and rebuild trust,” said Tim Sloan, Wells Fargo’s (NYSE: WFC) president and CEO. “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.”