According to L.A. city’s attorneys, Wells Fargo Bank’s culture of pressuring employees to reach surreal sales quotas pushed the latter in “unlawful and fraudulent conduct.” The conduct included opening accounts without prior authorization on behalf of their clients, charge customers with fictive fees, and harm their credit with no compensation.
The City of Los Angeles filed a civil complaint with a state court Monday against the bank. City attorney Mike Feuer disclosed that the bank’s employees also failed to properly handle their clients’ confidential information and close unauthorized accounts although they were requested to do so. The employees used confidential data to open new accounts without their clients’ knowledge and consent.
According to plaintiffs, Wells Fargo management condoned with such practices as long as they served to generate more fees and boost profits. But when customers tried to hold somebody responsible, employees usually took the blame.
The bank said that the current problems were caused by “rogue employees” who were either penalized or laid off. Nevertheless, city investigators found only symbolic efforts from the bank’s management to put an end to the abusive, but profitable practices.
LA attorneys also reported that when Wells did discipline its bankers for their unfair sales practices, it consistently failed to repair damages. The bank omitted to inform its clients on the breaches found, refunds they were entitled to, or other measures designed to undo the harm caused.
Although its culture seems to serve investors more than customers, Wells stated several times that the best interests of their clients were its highest stake. Only recently, the bank reported to its shareholders that it sold more accounts and service to private customers.
Wells underlined that its employees are trained towards providing their clients with products and services they need and could benefit from. It also said that the suit had no real basis.
But LA city attorneys are poised to make sure that the financial institution would pay for unlawfully using confidential data for its purposes and for failing to brief its customers over the breaches in their private data.
“We’re very concerned that consumers be told whenever their information is used for unauthorized purposes,”
Mr. Fuer said.
LA city currently seeks to shut down any fraudulent operation, as well as fine the bank with up to $2,500 penalties for every infringement detected. Also, plaintiffs plan to make sure that each Wells Fargo customer who was harmed by the practices gets fair restitution.
LA investigators eyed Wells Fargo in 2013 after a series of disturbing disclosures the bank’s employees made during a Times interview. Reporters found that employer statements were backed by financial documents and court papers in other lawsuits filed against the institution.
In that interview, respondents disclosed that some of their peers had to beg their family members and friends to open bogus accounts, were pushed into opening accounts for clients who didn’t want them, altering dissatisfied customers’ phone numbers so they do not trouble the bank with their complaints during customer satisfaction surveys, and even forging signatures when opening an account out of fear of management reprisal.
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