Wells Fargo Will Pay $16.3 Million to End TCPA Suit

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According to filings yesterday in Georgia federal court, Wells Fargo Bank, N.A. (Wells) will pay approximately $16.3 million to end a proposed class action alleging it illegally used an Automatic Telephone Dialing System (ATDS) to call customers’ cellphones without their consent.

Originally filed on April 14, 2015, the case is Markos v. Well Fargo Bank, N.A. (United States District Court for the Northern District of Georgia, Case No. 1:15-CV-01156).

The documents filed yesterday were the Unopposed Motion for Preliminary Approval of a Class Action Settlement and the Memorandum in Support of the Motion.

The Plaintiffs are asking for preliminary approval of a nationwide class action settlement reached with Wells. The original lawsuit alleged that Wells had called Plaintiffs and Settlement Class Members on their cellular telephones through the use of an ATDS or by using an artificial or prerecorded voice without Plaintiffs’ or Class Members’ prior express consent, in violation of the Telephone Consumer Protection Act (TCPA). The calls at issue were all non-emergency, debt-collection calls and texts made in connection with Home Equity Loans and Residential Mortgage Loans.

The settlement was reached only after good faith, contentious, arm’s-length negotiations, with the assistance of an experienced and well-respected private mediator, Hunter R. Hughes.

Wells will pay a non-reversionary cash sum of approximately $16,319,000, to be distributed (after deductions for cost of notice, claims administration, and Court-awarded attorneys’ fees and costs) on a pro rata basis to the Class Members who file qualified claims. Based upon the size of the fund, the number of class members, and Class Counsel’s experience with over a dozen similar large settlements, the expected per-class-member cash award, while dependent upon the number of claims, may be in the range of $25 to $75.

The proposed Settlement Class is defined as,

All users or subscribers to a wireless or cellular service within the United States who used or subscribed to a phone number to which Wells made or initiated one or more Calls during the Class Period using any automated dialing technology or artificial or prerecorded voice technology, according to Wells available records, and who are within Subclass One and/or Two.

Subclass One consists of “persons who used or subscribed to a cellular phone number to which Wells Fargo made or initiated a Call or Calls in connection with a Residential Mortgage Loan.”

Subclass Two consists of “persons who used or subscribed to a cellular phone number to which Wells Fargo made or initiated a Call or Calls in connection with a Home Equity Loan.”

A person who is a member of both Subclasses is eligible to make two claims on the Settlement Fund.

The parties’ good faith estimate of the number of Class Members (the Preliminary Class Size) is 3,296,755.

The three Class Representatives will ask the Court to award them service awards for the time and effort they have personally invested in the case, including declining offers of judgment pursuant to Rule of Civil Procedure 68. Wells agrees not to object to such incentive payments to be paid to Davis, Markos, and Page from the Settlement Fund provided that the payments do not exceed $60,000 in the aggregate or $20,000 for each Class Representative, subject to Court approval.

Class Counsel will apply to the Court for an award of attorneys’ fees and costs of 30% of the Settlement Fund. However, the Settlement is not dependent or conditioned upon the Court’s approval of Plaintiffs’ requests for fees or costs, or an award of any specific amount.

insideARM Perspective

There isn’t much perspective to be added here. The TCPA insanity continues. The settlement dollars keep coming.

This case was originally filed 14 months ago. For such a large settlement, that’s a short period of time. Wells contends they had consent. Plaintiffs contend they didn’t. Unfortunately, while it seems consent ought to be a black & white issue, it is not. insideARM does not have access to the discovery documents so it is impossible to opine on that issue.

Wells also raised the issue of standing (Spokeo argument) and whether this case was appropriate for class certification.

As with any settlement, neither side got exactly what they wanted. Wells is paying over $16 million to put this matter behind them in a case where their potential exposure was much greater. Class Counsel is agreeing to a settlement that is much lower than a maximum TCPA award they might have obtained.

Plaintiff’s attorneys are seeking 30% of the settlement fund (or approximately $4.8 Million) for their efforts on the matter while class member awards will receive be between $25 and $75. The Class Representatives could pocket $20,000 for “time and effort they have personally invested in the case.”

When will it end? Will it end?

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Posted in Collection Laws and Regulations, Credit Grantors, Debt Collection, Dialers, Featured Post, Mortgage Collections, TCPA .

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