Wells Fargo & Co. has tentatively agreed to settle a decade-old class-action lawsuit alleging that the bank overcharged millions of customers for bounced checks.
The agreement affects an unknown number of Wells Fargo's 1.75 million current customers and millions more former customers of Wells Fargo and Crocker National Bank, which Wells Fargo absorbed earlier this year.
The suit has slogged its way through the courts since it was filed by consumer advocates in 1976. Separate suits filed against Wells Fargo and Crocker were joined earlier this year when the two banks merged.
Attorneys for the customer group say the settlement is worth between $93 million and $123 million, which will be paid by Wells Fargo in the form of reduced service charges on savings and credit card accounts and in rebates to former customers who were charged as much as $10 for each returned check.
The bank has also agreed to reduce slightly its fees for bounced checks, to freeze all deposit account charges until next July and to not impose any new minimum balances on savings accounts before January, 1988.
Wells Fargo is preparing to notify its current customers, and as many of its former customers as it can locate, of the terms of the proposed settlement. Under the agreement, former customers will be reimbursed 30% of all bounced-check charges from March, 1973, until the time they left the bank. Some current account holders will also qualify for the 30% rebate. Customers must provide proof of the charges.
Formal approval of the settlement is expected after a final hearing Jan. 20.
Ralph Abascal, one of the original plaintiffs in the case, said he will continue to press his claims against the bank. He said the proposed settlement is too broad and does not adequately reimburse consumers. Abascal said he intends to fight Wells Fargo on all the fees that it charges customers, alleging that they are grossly in excess of the bank's costs.