Wells Fargo Expands Settlement Scope in Phony Accounts Litigation
- Employees boosted sales figures by covertly opening and funding accounts without customers’ approval.
Wells Fargo & Co. (WFC), one of the U.S. largest banks, said it would expand the financial terms of a class action Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term related to claims that the lender’s employees secretly opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals.
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The embattled bank will add $32 million to the previous agreement for a total settlement of $142 million, Reuters reports. The scope of the settlement is being expanded to include customers who had unauthorized accounts opened in their name as early as May 2002. The previous agreement only went back to 2009.
"We made a number of mistakes, there's no question about it. We're focused on fixing what was broken, making sure that we're making things right by our customers," Wells Fargo CEO Tim Sloan told CNN this week.
San Francisco-based banking giant said the revised settlement, which is subject to court approval, will cover all customers claiming that its employees opened roughly two million bank accounts and applied for 565,000 credit cards without customers’ knowledge or consent. In some cases, bank employees created fake email addresses to sign up customers for online banking services, accumulating late fees on accounts they never even knew they had.
The phony accounts scandal has roiled the third-largest US lender by assets, leading to the resignation of its former Chief Executive Officer John Stumpf who had decided to leave the bank with immediate effect earlier in October 2016.
The Consumer Financial Protection Bureau (CSFB) blamed Wells Fargo’s aggressive sales tactics. The federal consumer watchdog said employees at the world’s most valuable bank, which serves around 40 million retail customers, had been motivated to open the unauthorized accounts by compensation policies that rewarded them for drumming up new business.
The lender said it conducted a comprehensive review of its sales practices five years ago and it had taken “disciplinary actions, including terminations of managers and team members who acted counter to our values”.
About 5,300 Wells Fargo workers, representing roughly 1% of the total workforce, have lost their jobs over their involvement with the unauthorized accounts.
Wells Fargo & Co. (WFC), one of the U.S. largest banks, said it would expand the financial terms of a class action Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term related to claims that the lender’s employees secretly opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals.
The London Summit 2017 is coming, get involved!
The embattled bank will add $32 million to the previous agreement for a total settlement of $142 million, Reuters reports. The scope of the settlement is being expanded to include customers who had unauthorized accounts opened in their name as early as May 2002. The previous agreement only went back to 2009.
"We made a number of mistakes, there's no question about it. We're focused on fixing what was broken, making sure that we're making things right by our customers," Wells Fargo CEO Tim Sloan told CNN this week.
San Francisco-based banking giant said the revised settlement, which is subject to court approval, will cover all customers claiming that its employees opened roughly two million bank accounts and applied for 565,000 credit cards without customers’ knowledge or consent. In some cases, bank employees created fake email addresses to sign up customers for online banking services, accumulating late fees on accounts they never even knew they had.
The phony accounts scandal has roiled the third-largest US lender by assets, leading to the resignation of its former Chief Executive Officer John Stumpf who had decided to leave the bank with immediate effect earlier in October 2016.
The Consumer Financial Protection Bureau (CSFB) blamed Wells Fargo’s aggressive sales tactics. The federal consumer watchdog said employees at the world’s most valuable bank, which serves around 40 million retail customers, had been motivated to open the unauthorized accounts by compensation policies that rewarded them for drumming up new business.
The lender said it conducted a comprehensive review of its sales practices five years ago and it had taken “disciplinary actions, including terminations of managers and team members who acted counter to our values”.
About 5,300 Wells Fargo workers, representing roughly 1% of the total workforce, have lost their jobs over their involvement with the unauthorized accounts.