Fact Checked

Wells Fargo to pay settlement for fake accounts scandal

Outside of a Wells Fargo bank in a city Photo by Spencer Platt/Getty Images News/Getty Images Image: Outside of a Wells Fargo bank in a city

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Wells Fargo has agreed to pay $3 billion to settle matters with both the U.S. Securities and Exchange Commission and the Department of Justice for deceiving investors and customers in a fake customer account scheme from 2002 to 2016.  

The settlement with federal regulators and prosecutors comes a little more than a year after Wells Fargo agreed with the attorneys general of all 50 states and Washington, D.C., to pay affected consumers $575 million for the bank’s practices.

The $3 billion settlement with the SEC and DOJ …

  • Ends a civil investigation by the SEC and sets up a $500 million fund to compensate Wells Fargo investors who were harmed by the company’s misrepresentation of its business portfolio and “cross-sell” strategy.
  • Ends both criminal and civil investigations by the DOJ into these sales practices. This means Wells Fargo won’t face any criminal charges as long as it follows the terms of the agreement.

An investigation into Wells Fargo’s Community Bank arm found that the bank’s employees — under pressure to meet sales quotas — opened millions of unauthorized or fraudulent financial products, including checking accounts, savings accounts and credit cards, using customer information.

Want to know more?

What are the details?

Wells Fargo employees opened false accounts for about 14 years, from 2002 to 2016. What’s more, some customers who had fake accounts opened in their names may have been charged fees on those accounts.

Since these practices were uncovered in 2016, Wells Fargo has faced multiple criminal and civil investigations, reaching settlements with the Consumer Financial Protection Bureau and the attorneys general of all U.S. states and Washington, D.C. Wells Fargo has replaced its CEO and much of its leadership in the Community Bank division, and the bank says it has eliminated product-based sales goals that encouraged the opening of false accounts.

What does this mean for Wells Fargo customers?

If you’re a former or current Wells Fargo customer, here are some things you can do to make sure your accounts are secure and check on whether you’re entitled to any compensation.

  • Audit any accounts you have with Wells Fargo: Make sure the activity in your Wells Fargo accounts looks accurate, particularly if your accounts were open during the period when fraudulent activity occurred.
  • Check your credit reports: Make sure all the accounts that show up on your credit reports are accounts you’ve actually opened — and that all info on your accounts is up to date and accurate. You can dispute any inaccurate information on your credit report. Errors could lead to lower credit scores or affect your ability to open new accounts.
  • Contact the settlement administrator: The deadline has passed for filing a claim as part of the consumer settlement — but if you did make a claim, you can call the settlement administrator at 1-866-431-8549 to get recorded info about the status. You can also try emailing info@wfsettlement.com. If you weren’t part of the settlement but think an account or service was opened for you without your consent, Wells Fargo asks that you call 1-844-931-2273.

About the author: Paris Ward is a content strategist at Credit Karma, providing readers with the latest news that will aid their financial progress. She has more than a decade of experience as a writer an… Read more.