Wells Fargo & Co. has increased the estimated number of unauthorized checking, savings and credit card accounts that its employees allegedly opened over the past 15 years to 3.5 million. This is from documents filed in a California federal court last month. The San Francisco-based bank and a class of account holders estimate that between 2002 and 2017 Wells Fargo employees have opened approximately 3.5 million unauthorized accounts, replacing the previous 2.1 million estimate. But the account holders cautioned that the higher number was calculated based on public information, negotiations and discovery and it could be an overestimate. The lower 2.1 million estimate was originally reported by regulators last year, based on the bank’s internal analysis of accounts opened and credit card applications submitted between May 2011 and July 2015.
The brief said an additional 1.4 million unauthorized accounts could have been opened as early as 2002. That was the year, according to a recent bank internal investigation, that Wells Fargo executives first noticed employees opening accounts without customer authorization. The brief filed incorporates the larger estimate to calculate a maximum recovery amount. Wells Fargo announced in April that it expanded a $110 million class action settlement over allegedly fraudulent account generation to include claims stretching to May 2002 and bringing the total settlement amount to $142 million. Since then, the deal has received pushback from a separate group of Plaintiffs with potential future claims who argued to the court that the settlement would exclude them from the deal. If approved, the settlement would mark an end to a bevy of litigation following a Consumer Financial Protection Bureau (CFPB) investigation that uncovered more than 5,000 Wells Fargo employees tried to meet aggressive sales targets by opening millions of bank accounts and credit cards without customers’ knowledge.
In September, Wells Fargo agreed to pay the CFPB $185 million in civil penalties, but that agreement didn’t preclude dozens of Wells Fargo customers from pursuing class action claims over the bank’s sales practices. In February, Wells Fargo’s board of directors voted to fire four senior managers in connection with an ongoing investigation stemming from the scandal. The scandal also forced the resignation of then-Wells Fargo Chairman and CEO John Stumpf, as well as his forfeiture of a total of $69 million in unvested compensation. Additionally, Carrie Tolstedt, the former head of Wells Fargo Community Bank, where the problems occurred, was fired and saw $66.3 million in compensation clawed back.
Meanwhile, at least 12 putative class actions have been filed over the bank’s retail practices, including the instant suit, and approximately 5,300 employees were fired as a result of the problematic sales practice. A hearing on the settlement’s preliminary approval was scheduled for May 18 in San Francisco.
The Plaintiffs are represented by Derek W. Loeser, Gretchen Freeman Cappio, Daniel P. Mensher, Jeffrey Lewis and Matthew J. Preusch of Keller Rohrback LLP. . The case in which the settlement was reached is Jabbari et. al. v. Wells Fargo & Co. et al., (case number 3:15-cv-02159) in the U.S. District Court for the Northern District of California.
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