The city of Los Angeles sued Wells Fargo, alleging that rigid sales quotas at the bank have driven employees to open unauthorized accounts for customers, sticking them with bogus fees and damaging their credit, the City Attorney’s Office announced today.
The city filed the Los Angeles Superior Court lawsuit Monday.
“Consumers should be entitled to expect that major financial institutions will treat them fairly,” City Attorney Mike Feuer said. “Our lawsuit alleges that in Wells Fargo’s push for growth the bank often elevated profit over its customers’ legal rights.”
Wells has previously blamed the problems on a few rogue employees who the bank has appropriately disciplined, the Los Angeles Times reported, but the city’s investigation allegedly found only token efforts by Wells to prevent customer abuses.
Wells Fargo officials said the bank intends to “rigorously defend” against 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,” according to a statement from the bank. “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 complaint says the largest bank based in California encouraged its employees to engage “in unfair, unlawful and fraudulent conduct” through a pervasive culture of high-pressure sales. 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, according to the suit.
The lawsuit is seeking an injunction barring the practices, and seeks penalties of up to $2,500 for each violation, according to the City Attorney’s Office.
