The Class Action Settlement
Multinational financial services company, Wells Fargo, will pay out $40 million to resolve claims regarding their merchant services.
Patti’s Pitas, LLC and Queen City Tours filed the class action lawsuit against Wells Fargo Merchant Services, LLC, in August 2017 in a New York federal court.
The class action lawsuit asserts that the company charged excessive amounts for small-time businesses to use their payment processing service.
The lead plaintiffs claim that the extra charges on the businesses’ monthly invoices have significantly impacted their profit.
Wells Fargo Merchant Services has not acknowledged any wrongdoings or any of the allegations against them.
Despite this, they have agreed to pay the $40 million proposed settlement to benefit merchants who have used their payment processing service.
Both the company and the plaintiffs have agreed to the terms of the proposed settlement.
Aside from paying out the compensation, the company has also agreed to update the terms of their payment processing services/
According to the settlement terms, merchants who satisfy the following criteria are eligible as class members:
- Business who have contracted to use the company’s payment processing service
- The contract is valid within the identified class period, from August 4, 2011, to February 8, 2021.
- The merchant has done any of the following:
- Processed sales through the fixed pricing plan
- Paid the following fees:
- Monthly processing fee or non-validation payment card industry (PCI) compliance fee
- Billing fee
- Processed sales using other plans (except for the standard pricing plan)
- The merchant is not account managed within the class period
The settlement terms state that both current and former Wells Fargo Merchant Services customers can receive compensation, a portion of the settlement fund.
For current customers, the payment will be received automatically once final approval has been granted. The payment will be mailed through check at their address.
For former customers, they will need to submit a valid claim form before the deadline to receive the payment.
The payment will also be mailed to the address they have put in the claim form.
The settlement terms also identified three groups for valid class members:
- Class 1 – Customers who have used the fixed pricing plan to process their sales. 60% of the total settlement fund will be divided in this class.
- Class 2 – Customers who have paid the non-validation PCI compliance fee, statement billing fee, or monthly minimum processing fee. 10% of the settlement fund will be allocated for this class.
- Class 3 – Customers who have processed their sales using other plans aside from the fixed plan (except for standard plan or volume tier plan). The customer should not be account-managed within the class period. 30% of the settlement fund will be given to this class.
The total amount that each class member will receive will be computed after the deadline for submitted claim forms has passed.
The deadline for submitting valid claim forms is on July 23, 2021.
Customers can file for objections and exclusions until June 8, 2021.
The schedule for the final hearing is on July 22, 2021.
Editor’s Note on Wells Fargo Merchant Services Settlement:
This article is published to inform you of the latest settlement Wells Fargo Merchant Services will payout to resolve claims related to excessive charges.
Case Name & No.: Patti’s Pitas, LLC, et al. v. Wells Fargo Merchant Services, LLC, 1:17CV-04583-GRB, U.S. District Court New York
Products/Services: Wells Fargo Merchant Services’ payment processing service
Allegations: The company charged customers excessive amount to use their payment processing service
Status: Pending Final Approval
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