The City of Los Angeles is suing Wells Fargo, alleging some bank employees in the state have been pressured to adopt “unfair, unlawful and fraudulent conduct” against customers, including but not limited to misusing confidential data, the Los Angeles Times reported.
In a civil suit filed Monday (May 4), L.A. City Attorney Mike Feuer claimed that Wells Fargo opened unauthorized accounts in customers’ names, refused to close those accounts even after those customers complained, and even “raided” client accounts for funds to open new accounts – all in an effort to meet sales quotas.
According to the LA Times, the suit has been filed in conjunction with an unfair business practices law. Attorneys representing California cities can file on behalf of consumers across the state, notes the Times, and Feuer’s suit seeks penalties of up to $2,500 for every violation and additional restitution for those customers who were harmed by the alleged practices.
Among other allegations, the unauthorized accounts set up by Wells Fargo employees charged fees to clients and also damaged their credit.
"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, according to the LA Times.
Wells Fargo, which has stated it will defend itself against the allegations, in turn says problems begin and end with a few employees who have been disciplined or fired. But Feuer’s suit, which traces its genesis to a 2013 Times investigation that uncovered sales pressure at several branches nationwide, posits that only “token” efforts at redress have been made. “Your work was the catalyst for ours,” Feuer told the Times in an interview.
"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 LA suit alleges.