July 5, 2016

Wells Fargo Pays $16.3M To End TCPA Suit Over Robocalls

On June 29th, 2016, Wells Fargo Bank NA paid approximately $16.3 million to end a proposed class action alleging it illegally used an automatic telephone dialing system to call customers cellphones without their consent, according to a Wednesday filing in Georgia federal court. In a memorandum supporting their unopposed motion for preliminary approval of the settlement, the customers said an estimated 3 million-plus customers would potentially receive an award of between $25 and $75 each in the Telephone Consumer Protection Act suit. Named plaintiffs Steven L. Markos, Tiffany Davis and Gregory Page accused Wells Fargo of calling their cellphones in connection with home equity loans and residential mortgage loans using auto dialers and/or artificial or prerecorded voices. The parties “sharply” disagreed over whether customers consented to the calls and whether they have standing, according to Wednesday’s memorandum.

They allegedly reached a final settlement earlier this month. The plaintiffs said, “The settlement was reached only after good faith, contentious, arm’s-length negotiations, with the assistance of an experienced and well-respected private mediator. The settlement provides excellent value for the class.” Markos filed the suit in April of last year. Page filed a similar putative class action in Illinois federal court in July, while Davis launched a proposed class action with similar allegations in Georgia federal court in August. In October and November, the courts stayed the cases for mediation, according to the court filings. On Wednesday, Markos filed a motion for leave to amend his suit to include Page and Davis as named plaintiffs.

The parties allegedly have competing interpretations of what constitutes prior express consent under the TCPA. Plaintiffs say the law requires that a cellphone number be “provided during the transaction that resulted in the debt owed”, or in other words, the start of the credit or banking relationship, the memorandum said. If the court found that the TCPA allows prior express consent to be given any time a customer provides a cellphone number as a contact number, the amount of recoverable damages could be reduced significantly or eliminated altogether, plaintiffs claimed.

They continued to negotiate and initiated additional discovery to determine the final class size, according to court papers. The memorandum noted that class members who don’t opt out will release all claims arising out of Wells Fargo’s alleged use of robocalls specifically in connection with those loans. Plaintiffs’ attorneys said in the filing that they will seek fees and costs of 30 percent of the settlement.

However, they said the deal isn’t dependent or conditioned upon the court’s approval of those expenses. The settlement is “an excellent result when measured against twenty-five years of TCPA settlements,” the memorandum said. The plaintiffs’ attorneys declined further comment and a spokesman for Wells Fargo declined comment.