Wells Fargo Bank Commits Fraud Against Its Customers

Wells Fargo Bank is facing a lawsuit from the city of Los Angeles, which alleges that the bank participated in unfair business practices by persuading its employees to engage “in unfair, unlawful, and fraudulent conduct.” According to the lawsuit, Wells Fargo workers were under a great deal of pressure to meet sales goals, and thus, were in the habit of opening accounts for their current customers without first obtaining their permission.

The city of Los Angeles refers to Wells Fargo as a “fee-generating machine” because of its efforts to compel its employees to meet unrealistic sales goals. According to the city, “Wells Fargo places unrelenting pressure on its bankers to open several accounts for each customer. “ “Wells Fargo’s bankers are thus naturally and predictably forced to use alternative means to meet quotas.”

As a result of the workers’ actions, customers were subjected to more fees and a diminished ability to obtain credit anyplace else. For example, their credit reports were affected, thereby having an adverse impact on their capacity to obtain a car loan or mortgage. Customers also felt compelled to get identity theft protection because Wells Fargo accounts were being opened in their names without the customers’ consent. wells-fargo-robbery

The city is therefore attempting to secure a court order from the Los Angeles Superior Court that would mandate that the bank act in compliance with the law. It is also seeking to have Wells Fargo penalized with a fine of $2,500 per violation in accordance with California’s unfair competition statute and restitution.

In addition, the city alleges in its lawsuit that Wells Fargo workers were dishonest with customers when they told them that they had to open more accounts in order to get a checking account. Moreover, workers incorrectly informed customers that there were no fees associated with the accounts, and pressured customers into buying extra products, such as life insurance.

Furthermore, the city claims that Wells Fargo was in violation of state and federal law when it misappropriated customers’ private information, and neglected to inform customers that their private information had been misused. In response, representatives from Wells Fargo said that they have disciplined a few employees who have misappropriated customers’ personal information in order to open accounts without their permission.

Ken Wallman, a business owner, was one customer whose private information was misused by Wells Fargo workers. Wallman told Los Angeles Times in an interview that he opened a checking account with Wells Fargo, but eventually he had a dozen additional accounts because the bank opened additional accounts without first obtaining his approval. When Wallman tried to close the accounts, Wells Fargo refused and, instead, charged him extra fees.

Unfair Competition Law

Under California’s Unfair Competition Law (UCL), there are five definitions of unfair competition outlined in §17200. They are as follows:

  1. An illegal business act or practice;
  2. A business act or practice that is unfair;
  3. A business act or practice that is fraudulent;
  4. Advertising that is unfair, deceptive, untrue, or misleading; or
  5. Any act forbidden by §§17500-17577.5.

Under §17203, the court can order injunctions to prevent the unfair competition as well as order other equitable defenses. Victims of unfair competition can obtain relief through the court, which can order that money or property be returned to them. In the event that an injunction is issued in accordance with §17200, those who intentionally engage in unfair competition could be penalized up to $6,000 per day. And when a lawsuit is filed by a government agency, such as the city of Los Angeles, civil penalties of up to $2,500 per violation are permitted.

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