City of Los Angeles Sues Wells Fargo for Fraud
A civil complaint was filed against California’s largest bank, Wells Fargo, for violating state and federal laws by improperly using confidential information, and failing to notify customers of personal information breaches. Apparently, bank employees who were under pressure to make sales, issued credit cards and opened accounts without customer authorization, charging them fees, and damaging their credit. Wells Fargo has stated that the problem is a result of a few rogue employees that have since been fired. “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,” a spokesperson stated.
The lawsuit demands a court order to end encouragement of such fraudulent practices, and restitution payments of up to $2,500 for each violation. Wells Fargo apparently pressured its employees to meet sales standards so highly, it drove them to resort to fraudulent practices. Offenses include misusing confidential information to open unauthorized accounts, failing to close those accounts, and stealing money from authorized accounts to open unauthorized ones.
“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.
Widely accepted, uncontroversial bank industry sales practices known as bundling and cross-selling, in which individuals are encouraged to purchase multiple products, are the culprits in this case. Wells Fargo placed employees under high pressure to meet outrageous sales standards to promote company growth, often requiring them to sell more than 10 products to customers, depending on whether they were a business owner, had wealth management accounts, or were just a regular customer.
A convenience store owner in the San Fernando Valley says after being pressured to open additional accounts for four years, three saving accounts were opened in his name, despite him declining authorization. Even though the accounts were deleted when he complained, he says they were opened again without his knowledge months later. “I just feel like every time I go to the branch, it’s a battle with them,” he stated. “I’ve had more than 10 accounts at Wells Fargo. I only need one.”
If you or a loved one have fallen victim to Wells Fargo’s fraudulent business practices, and have suffered financially, the lawyers at Hodes Milman Liebeck are here to help you. Contact us today online at hmlm.com or call 866-730-1976 for a complimentary case evaluation.