Wells Fargo Sued Over Opening Extra Accounts To Hike Sales Quotas

May 05—Wells Fargo Bank employees opened unauthorized accounts and credit cards for customers in Los Angeles in a bid to up their sales quotas, according to a civil lawsuit filed by City Attorney Mike Feuer's office.

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Filed Monday in Los Angeles County Superior Court, the lawsuit claims Wells Fargo engaged in "unlawful activity including opening fee-generating customer accounts and adding unwanted secondary accounts to primary accounts without permission," according to Feuer's office.

Customers faced fees for each account opened, Feuer's office alleged. In some cases, customers also received "derogatory notes" on their credit reports after failing to pay fees on unauthorized accounts.

The bank also failed to tell customers of misuse of their personal information, the suit alleges.

Speaking at a Tuesday news conference, Feuer said the bank "elevated its profits over the legal rights" of its customers. He also announced the formation of a hotline to report issues related to Wells Fargo: 213-978-3393.

"We urge every Wells Fargo customer to review their records," Feuer said.

Wells Fargo spokesman Ancel Martinez said in an email the bank's "culture is focused on the best interests of its customers and creating a supportive, caring and ethical environment for our team members."

"We will vigorously defend ourselves against these allegations," Martinez wrote.

Headquartered in San Francisco, Wells Fargo has offices in 36 countries. The company provides banking, insurance, mortgages and other services.

Feuer's lawsuit claims the bank's managers and bankers engage in "gaming," which consists of "opening and manipulating fee-generating customer accounts" in order to meet sales quotas.

The suit claims Wells Fargo "terminated a small number of employees" who have engaged in gaming, but other employees have been rewarded and promoted for such practices.

Frank Ahn, who runs a convenience store in the San Fernando Valley, said the bank convinced him to open numerous accounts, some without his consent. He said he repeatedly faced $15 or $20 charges to his accounts.

Feuer's lawsuit names Wells Fargo & Company and Wells Fargo Bank, National Association. The latter is a subsidiary of Wells Fargo & Company.

The suit seeks civil penalties of $2,500 for each violation.

— Staff writer Greg Wilcox contributed.

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