SAN FRANCISCO–Calling it the “least-worst solution,” a judge here has signed off on a $142-million class action settlement in a lawsuit over Wells Fargo’s fake account scandal that will net the average customer approximately $35.
U.S. District Judge Vince Chhabria told attorneys who had objected to the settlement that it has flaws, but said it’s “rough justice” and was better than pressing forward with trial or proceeding with lots of individual lawsuits, according to the Los Angeles Times.
“There’s no doubt this is an imperfect solution, but what’s the alternative?” Chhabria asked. “I do believe this settlement is fair and there was a conscientious effort by both parties to come up with the least-worst solution for what’s happened here."
The settlement is just the latest for Wells Fargo resulting from actions taken by its employees to open more than three-million unauthorized savings accounts, credit cards and lines of credit from May 1, 2002, to April 20, 2017. More than 5,000 employees were fired as a result, while the bank has paid more than $1 billion in various fines to a variety of regulators, as CUToday.info has reported.
A spokesman for the bank told the Los Angeles Times the outcome of the most hearing is “another step forward for our broad and far-reaching $142 million settlement agreement that will support our efforts to make things right for our customers and further restore trust with all of Wells Fargo’s stakeholders.”
Payouts for individual customers will vary according to how many fake accounts were created in their names and the damage to their bank balances and credit scores, the Times added.
The attorneys in the case will receive approximately $21 million in fees.
Consumers from Utah and Texas will appeal the approved settlement to the U.S. Court of Appeals in San Francisco, said Steven Christensen, the attorney who filed the first consumer suit against the bank after the BCFP fined Wells Fargo in September 2016, the Times reported. The appeal will likely delay payout to the victimized Wells Fargo customers.