Wells Fargo Bank is facing allegations that it violated state and federal laws through the misuses of consumer information – as well as failing to notify people when their data was breached. The largest bank based in California faces charges in connection to alleged wrongdoing by employees.
The lawsuit maintains that consumers were forced by extreme sales pressure to open unwanted credit cards and unauthorized accounts. Those accounts went on to charge fees and damage consumer credit.
“In its push for growth, Wells Fargo often elevated its profits over the legal rights of its customers,” said L.A. City Attorney Mike Feuer.
For its part, the bank has gone the noble route and thrown the offending employees under the bus – blaming their newness and inexperience before verifying they had all, in fact, 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,” the San Francisco-based bank said in a statement.
The city of L.A. begs to differ – and claims that Wells Fargo’s efforts at preventing fraud have been “token” at best.
The current suit was filed under a law that allows Cailfornia city attorneys to seek relief on behalf of consumers statewide. Feur noted in a new conference yesterday (May 5) that additional violations could be determined during discovery.
“The bank had a culture of high-pressure sales that pushed employees toward fraudulent conduct,” Feuer said.
“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 claims.
The lawsuit’s focus in the common practice of bundling that takes place at banks, also known as cross-selling. This obligates bank employees to try to sell multiple bank products, even to customers looking for simple services like opening a credit card or starting a savings account.
Bundling and cross-selling are widely accepted and non-controversial, particularly at Wells Fargo, where on average customers often carry more than six products per household, according to its latest annual report.
The lawsuit alleges that Wells Fargo executives pushed employees to sell more than 10 products to customers based on a variety of factors. Branch workers were reportedly required to sell a certain number of products per day – even if foot traffic would not support the daily quota.
The lawsuit seeks both an end to the alleged practices along with penalties up to $2,500 for every violation.