Wells Fargo Plays Its Clients for Sales, LA Says

          
     LOS ANGELES (CN) – Wells Fargo creates a high-pressure sales environment that drives employees to open unauthorized accounts and credits cards under customer names, according to Los Angeles prosecutors.
     Prosecutor Mike Feuer filed the lawsuit against Wells Fargo & Company and Wells Fargo Bank, N.A., in state court on Monday, alleging that the bank targeted customers by “using pernicious and often illegal sales tactics.”
     Naming the People of the State of California as plaintiff, the lawsuit seeks civil penalties for unfair competition for gaming, and for failure to provide notice of a data breach. The City Attorney’s complex and special litigation section of its criminal branch is prosecuting the complaint.
     According to Feuer, Wells Fargo sets unrealistic sales targets for its bankers, driving them to open a high number of banking products to meet “unreachable” goals.
     “Wells Fargo has known about and encouraged these practices for years. It has done little, if anything, to discourage its employees’ behavior and protect its customers,” the 19-page civil complaint states.
     In a practice known as “gaming,” Feuer says bankers have taken money out of customers’ accounts to pay for fees in accounts they did not authorize. The bank placed customers in collections and posted “derogatory information” in their credit reports when the unauthorized fees were not paid, Feuer says.
     “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 result is that Wells Fargo has engineered a virtual fee-generating machine, through which its customers are harmed, its employees take the blame, and Wells Fargo reaps the profits,” the court filing states.
     Wells Fargo fired a small number of employees for the unethical practices, Feuer says, but the bank still pressures employees to sell as many financial products as possible, “thereby fostering the practice of gaming.”
     “Wells Fargo thus puts its employees between a rock and a hard place, forcing them to choose between keeping their jobs and opening unauthorized accounts,” the complaint states.
     Wells Fargo representative Mary Eshet said the bank will “vigorously defend” against the city’s claims.
     “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,” Eshet wrote in an email. “This includes training, audits and processes that work together to support our vision and values and our commitment to customers receiving only the products and services they need and will benefit from.”

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