According to a report from the Los Angeles Times, a lawsuit claims that Wells Fargo Bank coerced employees into opening “unauthorized accounts” for customers, sticking them with “bogus fees” along with destroying their credit.
The lawsuit was filed this Monday in Los Angeles by City Atty. Mike Feuer, who claims the California-based bank encouraged its employees to engage “in unfair, unlawful and fraudulent conduct” through a culture that pushed high-pressure sales.
From the Times:
Employees misused customers’ confidential information and often failed to close unauthorized accounts even when customers complained, the suit alleges.
Some employees went so far as to raid client accounts for money to open additional accounts, the suit alleges.
“The result is that Wells Fargo has generated a virtual fee-generating machine, through which its customers are harmed, its employees take the blame, and Wells Fargo reaps the profit,” the lawsuit states.
Wells Fargo has defended itself, saying that the abuses came as a result of a few rogue employees who have since been fired. But the investigation found that Wells’ action on preventing customer abuse was minimal at best.
“On the rare occasions when Wells Fargo did take action against its employees for unethical sales conduct, Wells Fargo further victimized its customers by failing to inform them of the breaches, refund fees they were owed, or otherwise remedy the injuries that Wells Fargo and its bankers have caused,” the suit says.
In a statement released this week, Wells Fargo says it will defend itself to the end in regards to the allegations:
“Wells Fargo’s culture is focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members,” the bank said. “This includes training, audits and processes that work together to support our Vision & Values and our commitment to customers receiving only the products and services they need and will benefit from.”
The lawsuit seeks a court order shutting down the alleged wrongdoing, along with penalties of up to $2,500 for every violation and restitution for customers who were harmed. If it succeeds in Los Angeles County Superior Court, it would apply to all residents of the county and perhaps to people outside its boundaries, Feuer said.
Feuer said he began investigating in reaction to a December 2013 Times story on sales pressure at Wells Fargo branches across the country. The story relied on about three dozen former and current Wells staffers, along with a review of internal bank documents and lawsuits filed against the bank.
The employees described how staffers, fearing retribution from managers, begged friends and family members to open ghost accounts; opened accounts that they knew customers didn’t want; forged signatures on account paperwork; and falsified phone numbers of angry customers so they couldn’t be reached for customer satisfaction surveys.
Read the entire L.A. Times original investigation into Wells Fargo here.
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