Wells Fargo announced that it has reached an agreement in principle to settle a class action lawsuit concerning retail sales practices, which was filed in May 2015 in the Northern District of California (Jabbari v. Wells Fargo, N.A., et al.). The settlement class will consist of all persons who claim that 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 during the period from January 1, 2009, through the date the Settlement Agreement is executed.  Wells Fargo expects this settlement to resolve claims in 11 other pending class actions that unauthorized accounts were opened in customers’ names or that customers were enrolled in products or services without their consent.

“This agreement is another step in our journey to make things right with customers and rebuild trust,” said Tim Sloan, Wells Fargo’s President and Chief Executive Officer. “We want to ensure that each customer impacted by our sales practices issue has every opportunity for remediation, and this agreement presents an additional option. We continue to encourage customers to contact us directly so that we can act quickly to refund fees and address any concerns.”

The settlement amount of $110 million will be set aside for customer remediation.  After attorneys’ fees and costs of administration, class members will be paid first for out-of-pocket losses, such as fees incurred due to unauthorized account openings.  Amounts remaining after out-of-pocket losses will be split among all claimants, based on the number and kinds of unauthorized accounts or services claimed.

The two sides disputed the applicability of the arbitration agreement contained in Wells Fargo’s deposit agreements.  In order to move forward and avoid continued litigation, Wells Fargo agreed to this settlement notwithstanding the arbitration clause.

Wells Fargo had fully accrued for the amount of this settlement at December 31, 2016.