Wells Fargo says $110M should make up for the fake account scandal

The phony account scandal led to thousands of Wells Fargo workers being fired.

The widespread phony account scandal that rocked Wells Fargo led to multiple lawsuits – but the bank says it's reached a settlement to pay them back, and that it should resolve a dozen suits.

The scandal, if you missed it, involved Wells Fargo employees setting up fake accounts for customers without telling them, in a chase for incentive bonuses. Many of those customers were then hit with overdraft fees or interest on debts they hadn't actually accrued.

More than 5,000 employees lost their jobs over it, and the Minnesota-born former CEO retired after it all came out.

On Tuesday, Wells Fargo announced it had agreed to a settlement to end a class-action lawsuit brought against the bank due to the scandal. The bank would pony up $110 million for "customer remediation" – basically compensating those people affected.

After attorneys' fees and admin costs, the money will first be used to cover out-of-pocket losses, such as fees that were levied because of unauthorized account openings. Whatever is left after that will be split.

CNN reports this would be on top of $3.2 million Wells Fargo has already paid out over 130,000 unauthorized accounts.

Who would be eligible? Anyone who claims Wells Fargo "opened an account in their name without consent, enrolled them in a product or service without consent, or submitted an application for a product or service in their name without consent" from 2009 through whenever this settlement is finalized.

The bank also says it expects this agreement to resolve 11 other class-action lawsuits that were filed over the phony accounts.

The settlement still has to be approved by the courts. When that happens, customers will be notified about how they make a claim.

Next Up