LOS ANGELES, May 5 (UPI) — Wells Fargo employees allegedly opened bank accounts without customers’ permission in order to reach sales quotas, a lawsuit accusing the bank of fraud says.
The lawsuit, filed Monday in Los Angeles County Superior Court, accuses Wells Fargo of encouraging bankers to engage in illegal sales tactics in order to meet “unreachable goals.”
“As a result, Wells Fargo’s employees have engaged in unfair, unlawful and fraudulent conduct, including opening customer accounts and issuing credit cards without authorization,” the lawsuit, filed by Los Angeles city attorney Michael Feuer, said.
The bank is also accused of opening customer accounts and adding unwanted secondary accounts, both of which generate fees, without permission.
By doing so, Wells Fargo has “caused significant stress to, and hardship and financial losses for, its customers” by withdrawing money from authorized accounts to pay for fees on unauthorized accounts, the lawsuit said. Customers were also placed into collections and received negative marks on credit reports when those unauthorized fees went unpaid.
The lawsuit points to a brochure encouraging employees to make sure customers on average have eight open accounts with Wells Fargo as part of its “Going for gr-eight” campaign.
“Our average retail banking household has about six products with us,” the brochure, titled “The Vision & Values of Wells Fargo” says. “We want to get to eight … and beyond.”
“Despite Well Fargo’s knowledge of gaming by its employees, it has done little, if anything, to terminate these practices, nor to reform the business model it created that has fostered them,” Feuer said in the lawsuit. “The policies that encourage these tactics continue, and employees who engage in them continue to be rewarded monetarily, and even promoted.”
By allegedly violating California’s unfair competition laws, Wells Fargo could be fined up to $2,500 for each violation plus restitution to customers. The lawsuit doesn’t clarify how many customers have allegedly been affected by these practices.
In a statement provided to UPI, Wells Fargo said it would “vigorously defend” itself 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,” the statement read. “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.