Bank ups fake-account settlement to $142 million

Wells Fargo & Co. has agreed to boost its payout in a class-action settlement over unauthorized accounts to $142 million, up from the $110 million it announced just three weeks ago, according to documents filed this week.

The scandal-rocked bank agreed to the larger settlement after an internal report released last week showed that bank officials knew about unethical sales practices — including the creation of debit cards without customers’ authorization — as early as 2002.

The settlement as proposed last month would have covered customers who had unauthorized accounts opened for them in 2009 or later. Now the bank has added $32 million to the pot and agreed to pay customers affected by that practice going back to May 2002. A federal judge must still sign off on the deal.

Settlement documents filed in federal court in San Francisco late Thursday did not make clear how many customers may be eligible for the settlement or how many additional customers will be eligible because of the extension. The documents outline a process for how affected customers can make a claim for compensation, so the number of eligible settlement participants may grow.

The bank has said up to 2.1 million unauthorized checking, savings and other accounts were created, but that figure includes multiple accounts created for some individual customers.

Tim Sloan, the bank’s chief executive, said the expansion of the agreement was “an important step to make things right for our customers.”

“On our journey to rebuild trust, we want to ensure our customers feel confident that we have heard their concerns about retail sales practices, which includes offering them numerous opportunities for remediation,” he said in a statement released Friday.

But consumer advocates and attorneys for other Wells Fargo customers say the revised settlement still isn’t enough.