What is the Wells Fargo case about?
The lawsuit seeks compensation for Wells Fargo customers affected by the practice of opening, funding, or manipulating consumer and small business deposit accounts, and unsecured credit cards and lines of credit without customer consent, or knowledge.
What is a Class Action?
A class action is a representative lawsuit. One or more plaintiffs (who are also called “class representatives”) sue on behalf of themselves and all other people with similar claims, who are not named, but are described in the class definition and are called “Class Members.” When a class action is settled, the Court resolves the issues in the lawsuit for all Class Members, except for those who leave (opt out of) the class. Opting out means that you will not receive benefits under the Class Action Settlement.
How do I know if I am part of the Wells Fargo Jabbari Settlement Class?
Everyone, except those who have opted-out, who had a consumer or small business Wells Fargo savings, checking or similar accounts, or had a Wells Fargo credit card is included in the Jabbari class.
What accounts are included in the Class Action Settlement?
The Class Action Settlement in Jabarri covers Wells Fargo consumer or small business checking or savings accounts, unsecured credit cards, or unsecured lines of credit opened without customer consent, or unauthorized applications for these products. These accounts are called “Unauthorized Accounts”. The Class Action Settlement also provides benefits to consumers who purchased Wells Fargo Identity Theft Protection Services.
Am I included in the Jabbari Class Action Settlement?
You are included in the Class Action Settlement and considered a Class Member if you are in the Class, which is defined as:
All Persons for whom Wells Fargo or Wells Fargo’s current or former subsidiaries, affiliates, principals, officers, directors, or employees opened an Unauthorized Account or submitted an Unauthorized Application, or who obtained Identity Theft Protection Services from Wells Fargo during the period from May 1, 2002, to April 20, 2017, inclusive.
The three terms that are printed in bold are important to understanding who is included in the Class:
• “Unauthorized Account” refers to consumer and small business checking and savings accounts, unsecured credit cards, and unsecured lines of credit, so long as they were opened without consent.
• “Unauthorized Application” means an application for one of those accounts or products, so long as it was submitted without consent.
• “Identity Theft Protection Services” refers to authorized enrollment in products or services designed to monitor and alert enrolled customers when specific information is reported to credit bureaus.
The following entities and individuals are excluded from the Class:
• Wells Fargo’s officers, directors and employees;
• Judicial officers and their immediate family members and associated court staff assigned to this case; or
• Persons or entities who or which timely and properly exclude themselves from the Class as provided in the Class Action Settlement.
Is the Jabarri settlement final?
A Federal Court in San Francisco has preliminarily approved a class action settlement. Parties were given an opportunity to opt out until February 19, 2018. After the opt out deadline, there will be a final fairness hearing before the proposed settlement can be finalized.
What is the difference between objecting to the Jabbari Class Action Settlement and opting out?
Opting out is telling the Court that you do not want to be part of the Class Action Settlement, and you do not want to receive any benefits from that specific lawsuit.
Objecting is telling the Court that you do not like the Class Action Settlement for some reason. You can object only if you do not opt out of the Class. If you opt out, you have no basis to object to the Class Action Settlement because the case no longer affects you.
How is the Mitchell case different from the Jabarri case?
The Jabarri case was settled based on the fact that everybody would have to go to arbitration. Arbitration is more expensive, and generally is harder for numerous plaintiffs. The Mitchell case, through two years of forcing the issue, has overcome the mandatory arbitration clause alleged by Wells Fargo and is expected to go to trial in front of a federal judge.
How do I join the Mitchell case?
The presiding judge is not allowing individuals to be added to the case while some other issues are figured out. Once the other issues are figured out, you can try to join as a plaintiff, or if class certification is granted, as a class member in the Mitchell case. Please note that this is not guaranteed that you will be able to join.
If you want to join the Mitchell case, you will need to opt out of the Jabbari case by filling out the opt out form, then provide your contact information to us using the form on this page. We will contact you if/when the judge allows new plaintiffs to be added. Note that providing your information does not add you to the Mitchell case and does not create an attorney-client relationship.
Has Wells Fargo waived the arbitration agreement?
Wells Fargo has waived the arbitration agreement for plaintiffs in the Mitchell case. Wells Fargo cannot make plaintiffs of the Mitchell case arbitrate their claims.
Wells Fargo CEO Timothy Sloan stated in a hearing before congress that the account agreements from real accounts would not be used to make fake accounts go into arbitration. Wells Fargo has not affirmatively stated that this is a legal waiver of its right to enforce the arbitration agreement. Wells Fargo could still claim that Sloan’s words were not a waiver, but the interview seems to show Sloan waiving the right to use real account to govern the fake accounts.
What am I giving up in exchange for receiving benefits under the Class Action Settlement?
If the Court approves the Class Action Settlement, it becomes final. If you have not excluded yourself from it, you will be eligible for the benefits described above. In exchange, you will give up your right to sue Wells Fargo and related parties for the claims being resolved by this Class Action Settlement
How do I get out of the Class Action Settlement?
If you do not want to receive benefits from the Class Action Settlement, and you want to keep the right to bring claims against Wells Fargo about the legal issues in this case, then you must take steps to remove yourself from the Class Action Settlement. You may do this by asking to be excluded —sometimes referred to as “opting out” of—the Class Action Settlement. To do this, you must either opt out using the form provided at www.WFSettlement.com or mail your request in writing to the Settlement Administrator. Choose only one of those options. If you choose to mail your request to exclude yourself in writing, your request must include:
• Your name, address, email, and telephone number;
• If you are submitting the request on behalf of a business or trust (rather than on behalf of yourself as an individual), the name of the business or trust;
• A statement saying that you wish to exclude yourself from the Class Action Settlement in Jabbari v. Wells Fargo, No. 3:15-cv-02159 (N.D. Cal.); and
• Your personal signature and date.
You must mail your exclusion request, postmarked no later than February 19, 2018, to Opt Out Wells Fargo Settlement, P.O. Box 2594, Faribault, MN 55021-9594. Substantial compliance with the requirements for excluding yourself will be sufficient.
If I do not exclude myself, can I sue Wells Fargo for the same thing later?
No. Unless you exclude yourself, you give up the right to sue Wells Fargo for all of the claims that this Class Action Settlement resolves.
Wells Fargo has stated that if it is unable to resolve issues directly, customers who believe they received a product or service they did not want or authorize are offered a free mediation service with an independent third-party mediator. This offer is separate from the Class Action Settlement. While Class Members generally must agree to release their claims against Wells Fargo in exchange for getting the benefits of the Class Action Settlement, Class Members may still initiate a mediation with Wells Fargo. However, they will not be allowed to recover twice (“double recovery”) for any damages that were compensated through the Class Action Settlement.
If I exclude myself, can I still get full benefits from the Class Action Settlement?
No. If you exclude yourself, you will not get any benefits from the Class Action Settlement. However, you may be able to bring a separate case against Wells Fargo.
If I opt out and pursue my own case, could I get a larger recovery?
Federal and state laws provide for various remedies, including actual damages, statutory damages, punitive or multiple damages, and rescission, if a claim is proved at trial and upheld on appeal. The probability of succeeding with these claims cannot be predicted with certainty, and prosecuting them would take additional time and may be subject to offsets or deductions for attorneys’ fees and costs. In addition, Wells Fargo may argue you are required to individually arbitrate your claims against it, which is what Wells Fargo argued in this case. The Class Action Settlement is designed to provide benefits that are certain, available on a classwide basis, and not subject to the delay and risk of arbitration, trial, and appeal.
What if I want to join the Mitchell v. Wells Fargo case?
You have to first opt-out of the Jabbari case prior to the February 19, 2018 deadline. Then you may be able to petition the court to be added as a plaintiff. Opting out of Jabarri does not ensure that you will be able to join the Mitchell case.
What Credit Impact Damages can I receive if I participate in the Class Action Settlement?
Credit Impact Damages are designed to compensate Class Members who paid a higher interest rate on a loan or credit card because their credit score was hurt by an unauthorized Wells Fargo credit card, line of credit, or small business deposit account, or an unauthorized application for one of those products.
Credit Impact Damages are also designed to compensate Class Members who paid a higher interest rate on a loan or credit card because their credit score was hurt by derogatory reporting on an authorized credit card as a result of that credit card being linked to an Unauthorized Account (a consumer or small business deposit account) for overdraft protection.
Credit Impact Damages are calculated using data from your credit report. If you actually activated or used an unauthorized account Credit Impact Damages are calculated using data from your credit report. If you actually activated or used an unauthorized Wells Fargo credit card, line of credit, or small business deposit account, you’re entitled to an Additional Compensation payment, but you won’t receive Credit Impact Damages.
Please keep in mind that Credit Impact Damages are designed to compensate Class Members for the increased cost of certain credit that they actually received. They’re not designed to compensate Class Members who believe they were denied certain credit entirely. If you believe that you were denied certain credit due to an Unauthorized Account and that your damages due to this loss of credit are large enough to justify bringing suit against Wells Fargo on your own, you should consider excluding yourself from this Class Action Settlement.
Likewise, Credit Impact Damages are not designed to compensate Class Members for other damages unrelated to increased borrowing costs, such as denial of housing or employment. If you believe you experienced other, non-borrowing-related harm due to the impact on your credit score from an Unauthorized Account and that your damages are large enough to justify bringing suit against Wells Fargo on your own, you should consider excluding yourself from the Jabbari Class Action Settlement. Doing this will preserve your right to bring a separate claim against Wells Fargo.
What if I am already in the Mitchell v. Wells Fargo case?
There are less than 60 plaintiffs who are currently part of the Mitchell case. If you are one of the named plaintiffs, you still need to file the Jabbari opt-out prior to the above noted deadline. If you fail to file the opt-out in a timely manner, you will automatically be included in the Jabbari class action, and excluded from the Mitchell litigation.
How are Credit Impact Damages calculated in Jabbari?
Class Counsel retained experts to determine how different events associated with an unauthorized credit card, line of credit, or small business deposit account, an unauthorized application for one of these products (an inquiry to a credit bureau, the creation of a credit-card account, and so on), or a derogatory report associated with an authorized credit card as a result of overdraft protection for an unauthorized deposit account, would affect a person’s credit score. If you submit a claim form and authorize the Settlement Administrator and the experts to access your credit report, the information from your credit report will be used to determine whether your credit score was damaged by the unauthorized credit product. You will be eligible for Credit Impact Damages only if your credit score went down and you received credit within 12 months after the relevant Unauthorized Account was opened or within a period of up to 7 years after you experienced a derogatory report associated with an authorized credit card as a result of overdraft protection for an unauthorized deposit account.
Impact of Lowered Credit Score: A lowered credit score typically increases a consumer’s cost of credit only if it drops the consumer from one particular credit score range (or “tier”) into another tier. Changes within the same tier usually don’t increase the cost of credit. After research and testing, the experts will create a set of tiers like those used by a hypothetical “average” lender in setting the cost of credit.
The set of tiers created by these experts is only an approximation, because every lender uses a different set of tiers. Rather than trying to determine what tiers every lender of every Class Member actually used—a nearly impossible task—the experts will instead calculate the probability that a particular event moved a customer from one tier to another.
The increase in cost of credit caused by a drop in credit score tier will vary from lender to lender and will depend on the type of credit. Class Counsel’s experts will determine what values to use for the increase in borrowing cost. Damages will be computed for the expected time an average consumer would have retained the loan.
With this information, it will be possible to calculate how much the cost of that credit would have increased if the unauthorized credit card, line of credit, or small business deposit account, or an unauthorized application for one of these products, moved the Class Member into a lower credit score tier.
Calculation of Credit Impact Damages: To calculate Credit Impact Damages, the increase in the cost of credit will be multiplied by the probability that your credit score moved into a different tier, based on the number and kind of events that preceded the extension of that credit. Some Class Members may have more than one valid loan that was potentially affected by a prior Unauthorized Account and eligible for payment. In that case, the total Credit Impact Damages will be equal to the sum of Credit Impact Damages for each valid loan that was affected. To the extent it is not possible to calculate the effect on your credit score (for example, some older accounts), your Credit Impact Damages calculation may be based on expert analysis and available data.
What is an example of what Credit Impact Damages might be?
Here is one example of calculation of Credit Impact Damages for one particular credit product: Suppose a Class Member with a 12-point drop in credit score due to an Unauthorized Account took out a three-year used car loan for $18,000 and that the Class Member potentially paid increased interest of 2% due to the 12-point drop moving him into a lower credit tier. For such a Class Member, the calculation of Credit Impact Damages related to this auto loan would be as follows:
Principal auto loan amount: $18,000
Increased borrowing cost due to dropping to a lower tier: 2%
12-point drop in credit score translates to 12/100 probability of dropping to a lower tier: 0.12
Average length of loan: 3 years
Credit Impact Damages $18,000 × 0.02 × 0.12 × 3 = $129.60
In determining Credit Impact Damages, the Class Action Settlement considers only events that occurred within a certain time period after the unauthorized credit card, line of credit, or small business deposit account was opened, or after the unauthorized application for one of these products was submitted. Some events don’t have any effect on your credit score after a particular period. The experts have determined that the relevant period is generally 12 months.
Wells Fargo’s unauthorized actions could have resulted in delinquencies or derogatory marks reported on consumers’ credit reports. In these instances, the experts’ calculations will extend until the delinquency or derogatory mark was removed from the credit report, to cover a period of up to 7 years following the delinquency or derogatory mark.
What other settlements has Wells Fargo entered into? How do they affect the Class Action Settlement?
In September 2016, Wells Fargo entered into settlements with three government agencies: the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, and the Los Angeles City Attorney. Under the Consumer Financial Protection Bureau settlement, Wells Fargo was required to set aside $5 million for refunding fees paid by customers in connection with Unauthorized Accounts. Under the Los Angeles City Attorney settlement, Wells Fargo was required to refund certain fees to customers identified by a third-party consultant as potentially having had Unauthorized Accounts.
These prior settlements may affect Class Members’ Fee Reimbursement under the Class Action Settlement. If Class Members have already received reimbursement under the prior settlements, they will not receive a Fee Reimbursement under the Class Action Settlement for the same accounts. If Class Members have not been reimbursed for fees under these prior settlements, and claim that they had fees in connection with an Unauthorized Account, they are eligible to receive a Fee Reimbursement under the Class Action Settlement. The prior settlements will not affect the Credit Impact Damages or Additional Compensation that Class Members receive.
The Class Action Settlement will not diminish Wells Fargo’s obligation to reimburse fees or to provide other relief required by its settlements with the Consumer Financial Protection Bureau or the Los Angeles City Attorney.