Wells Fargo to pay $110 million to settle fake account suit

[TexasTowelie]

Source: AP

Wells Fargo has agreed to pay $110 million to settle a class-action lawsuit over up to 2 million accounts its employees opened for customers without getting their permission, the bank announced Tuesday.

It's the first private settlement that Wells has reached since the company paid $185 million to federal and California authorities late last year. Authorities said bank employees, driven by high-pressure sales tactics, opened the bank and credit card accounts without customer authorization.

Wells also disclosed Tuesday that a federal regulator had downgraded its rating under a law designed to help monitor and promote banking practices to low-income and minority communities. The Office of the Comptroller of the Currency cited the sales practices as one reason for the downgrade. The move means restrictions on Wells' business, including opening more branches or making acquisitions.

The settlement will include customers who had accounts opened without their permission, or were signed up for a product they did not agree to, going back to Jan. 1, 2009. Wells Fargo says it believes this settlement, which is subject to court approval, will resolve the 11 other pending class-action lawsuits filed against it over the accounts.

Read more: http://abcnews.go.com/US/wireStory/wells-fargo-pay-110-million-settle-fake-account-46430399

[Throck]

1. Where goes the settlement money go?

The lawyers, the government or the victims?

How much compensation do the victims actually get?

What happened to the whistle blowers?

[joshdawg]

2. Good question.

110 million is just pocket change for WF.

[Whiskeytide]

4. This was a civil class action...

... filed by the victims. The lawyers will get a %, and the account holders will get the rest. The whistle blowers would likely have been paid a % of the govt's settlement last year - depending on what federal statutes were implicated.

[7962]

3. Should put another zero behind that number. Nt

[Freddie]

5. What about all the employees

That were fired because they opened these accounts due to unreasonable sales pressure from above? Or who were fired because they refused and didn't meet sales goals? Or were fired for ridiculous trivial reasons because they squealed?
My son was a teller at another bank and these issues were well known in the banking industry for years before they were caught.

[Dustlawyer]

6. When will we ever take them to trial and criminally prosecute the decision makers?

This is why the banks keep doing this, no risk of jail!

[dalton99a]

7. What a joke.

[Egnever]

8. So roughly $100 to every person they stole from

Seems legit..

These fines are a joke.