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Wells Fargo to Settle Fake Account Opening Lawsuit for $110M
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Wells Fargo & Company (WFC - Free Report) has agreed to pay $110 million to resolve a lawsuit filed against it by customers in May 2015. The class-action suit related to the bank’s practice of opening up more than 2 million credit and deposit accounts for its customers without their permission since 2009.
Wells Fargo expects this payment to settle claims in 11 other pending suits, including 10 in San Francisco federal court. Notably, the settlement is yet to be approved by the court.
If approved, the company will have to repay the fee that its employees charged from customers for the fake accounts that they opened.
The company’s CEO Tim Sloan said, “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.”
He further added, “We continue to encourage customers to contact us directly so that we can act quickly to refund fees and address any concerns.”
Earlier in Sep 2016, Wells Fargo had agreed to pay $185 million in fines and penalties to federal regulators and the Los Angeles city attorney’s office pertaining to similar charges. Following this, it has fired nearly 5,300 employees. Further, it put an end to its unreasonable sales target practices, which prompted its employees to sell more in order to earn additional fees. Besides this, Wells Fargo’s then Chairman and CEO John Stumpf, quit his job in October.
Shares of Wells Fargo gained only 2.9% in the last two years, significantly underperforming the 22.8% growth for the Zacks categorized Major Regional Banks industry. The primary reason for this underperformance is the substantial plunge in shares following the September lawsuit settlement.
While the current crisis at Wells Fargo will take some time to alleviate, the company’s solid capital position, growing loans and deposits, and improving credit quality position it well for growth. Moreover, the latest move should help the San Francisco-based bank regain its customers’ trust.
Currently, the company carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the finance space are Raymond James Financial, Inc. (RJF - Free Report) , Bank of America Corporation (BAC - Free Report) and Comerica Incorporated (CMA - Free Report) .
Raymond James Financial witnessed an upward earnings estimate revision of 3.1% for the current fiscal year, in the last 60 days. Its share price increased 33% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of America carries a Zacks Rank #2 (Buy). For the current year, its Zacks Consensus Estimate was revised 1.2% upward in the last 60 days. The company’s share price increased 54.9% in the last six months.
Comerica also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 1.7% for the current year, in the last 60 days. Its share price increased 45.8% in the last six months.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Wells Fargo to Settle Fake Account Opening Lawsuit for $110M
Wells Fargo & Company (WFC - Free Report) has agreed to pay $110 million to resolve a lawsuit filed against it by customers in May 2015. The class-action suit related to the bank’s practice of opening up more than 2 million credit and deposit accounts for its customers without their permission since 2009.
Wells Fargo expects this payment to settle claims in 11 other pending suits, including 10 in San Francisco federal court. Notably, the settlement is yet to be approved by the court.
If approved, the company will have to repay the fee that its employees charged from customers for the fake accounts that they opened.
The company’s CEO Tim Sloan said, “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.”
He further added, “We continue to encourage customers to contact us directly so that we can act quickly to refund fees and address any concerns.”
Earlier in Sep 2016, Wells Fargo had agreed to pay $185 million in fines and penalties to federal regulators and the Los Angeles city attorney’s office pertaining to similar charges. Following this, it has fired nearly 5,300 employees. Further, it put an end to its unreasonable sales target practices, which prompted its employees to sell more in order to earn additional fees. Besides this, Wells Fargo’s then Chairman and CEO John Stumpf, quit his job in October.
Shares of Wells Fargo gained only 2.9% in the last two years, significantly underperforming the 22.8% growth for the Zacks categorized Major Regional Banks industry. The primary reason for this underperformance is the substantial plunge in shares following the September lawsuit settlement.
While the current crisis at Wells Fargo will take some time to alleviate, the company’s solid capital position, growing loans and deposits, and improving credit quality position it well for growth. Moreover, the latest move should help the San Francisco-based bank regain its customers’ trust.
Currently, the company carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the finance space are Raymond James Financial, Inc. (RJF - Free Report) , Bank of America Corporation (BAC - Free Report) and Comerica Incorporated (CMA - Free Report) .
Raymond James Financial witnessed an upward earnings estimate revision of 3.1% for the current fiscal year, in the last 60 days. Its share price increased 33% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bank of America carries a Zacks Rank #2 (Buy). For the current year, its Zacks Consensus Estimate was revised 1.2% upward in the last 60 days. The company’s share price increased 54.9% in the last six months.
Comerica also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 1.7% for the current year, in the last 60 days. Its share price increased 45.8% in the last six months.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>