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Wells Fargo Scam Accounts Class Action Lawsuit

This class action alleges that Wells Fargo violated state and federal law by fostering a culture that led to thousands of employees creating fake customer accounts to meet internal “cross-selling” targets while forcing those account holders to incur fees and expenses.

There has been a ton of press on this issue and the CFPB has fined Wells Fargo close to $200 million.  This lawsuit seeks to make sure that all account holders are also made whole.

How did it work?  Wells Fargo devised and implemented a policy of maximizing the number of separate accounts held by its individual banking customers, and then assessing fees to the customers on the basis of those accounts.

Wells Fargo accomplished this policy by “cross-selling” banking products and services to existing customers without their knowledge or consent.  Wells Fargo obtained at least tens of millions of dollars in revenue from fees assessed to the “cross-sold” accounts.

Wells Fargo formalized its cross-selling efforts through a so-called “Gr-eight” initiative.  Under that initiative, Wells Fargo sought to increase the number of accounts held by each of its customers to eight. As implemented by Wells Fargo, the “Gr-eight” initiative generated a very significant revenue stream for the bank.

The “Gr-eight” initiative markedly increased Wells Fargo’s revenue from fees, in part
because the bank created and enforced sales quotas and compensation incentives that led
many of its bankers to engage in unscrupulous practices toward consumers.

Bankers who met Wells Fargo’s cross-selling sales quotas were financially rewarded.  Bankers who did not meet these quotas were chastised and pressured by Wells Fargo managers to “do whatever it takes” to meet the quotas.

There was intense pressure within Wells Fargo to cross-sell. Wells Fargo managers evaluated each banker’s performance, based upon his or her cross-selling sales quota, four times per day.  Wells Fargo’s cross-selling quota system required each Wells Fargo banker to meet a set number of daily “solutions.” By “solutions” Wells Fargo meant the opening of new bank and credit card accounts. Bankers who did not meet their “solutions” quotas were disciplined with negative feedback or by being required to work extra hours.

As part of Wells Fargo’s “Gr-eight” initiative, several thousand Wells Fargo employees engaged in the following acts and practices, among others, without the knowledge or consent of the affected banking customers:

  • opening unauthorized bank accounts for Wells Fargo customers;
  • transferring funds to those unauthorized accounts from authorized accounts;
  • submitting credit-card applications Wells Fargo customers had not requested;
  • using Wells Fargo customers’ information to order debit cards they had not
  • requested; and
  • enrolling Wells Fargo customers in online banking services they had not requested.

One practice in which Wells Fargo bankers engaged to meet their sales quotas was known as “simulated funding.” Wells Fargo provided financial incentives to bankers who funded accounts shortly after their opening. These incentives prompted Wells Fargo bankers to open deposit accounts without customers’ knowledge and then to transfer funds from the customers’ preexisting accounts to temporarily fund the unauthorized accounts, so as to trigger compensation for the banker under Wells Fargo’s program of incentives.

In order to conceal this unauthorized activity from consumers, Wells Fargo’s bankers used e-mail addresses not belonging to its customers to enroll them in online banking services they
had neither requested nor authorized. The bankers also created debit cards and personal identification numbers to activate those debit cards without notice to or approval from the affected consumers.

This class action seeks to require that Wells Fargo return all ill gotten fees from account holders.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Class action alleges Wells Fargo earned millions in illegal fake accounts

September 23, 2016

This complaint chronicles the Wells Fargo scam account lawsuit.  The bank conceded that it made millions by setting up fake accounts and the complaint sets forth many facts about the internal pressure the bank put on employees to make sales quotas.

wells_fargo_fake_account_complaint.pdf

Case Event History

Class action alleges Wells Fargo earned millions in illegal fake accounts

September 23, 2016

This complaint chronicles the Wells Fargo scam account lawsuit.  The bank conceded that it made millions by setting up fake accounts and the complaint sets forth many facts about the internal pressure the bank put on employees to make sales quotas.

wells_fargo_fake_account_complaint.pdf
Tags: Deceptive Online Services, Excessive Fees, Illegal Electronic Debits, Unlawful Fees, Your Bank