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City of Los Angeles Sues Wells Fargo for Violating Unfair Competition Law – Glass & Goldberg | Financing, Property & Bankruptcy Law
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City of Los Angeles Sues Wells Fargo for Violating Unfair Competition Law

City of Los Angeles Sues Wells Fargo for Violating Unfair Competition LawOn May 5, 2015, the City of Los Angeles filed a lawsuit against Wells Fargo Bank N.A., alleging that the bank’s aggressive sales tactics resulted in the establishment of fraudulent accounts and gathering unauthorized fees from unknowing customers.

The suit was filed in Los Angeles County Superior Court by L.A. City Attorney Mike Feuer, and alleges that Wells Fargo set unrealistic sales quotas for its employees and adopted policies that have driven its bankers to engage in fraudulent behavior to meet unattainable goals.

Specifically, the suit charges Wells Fargo with “unfair, unlawful and fraudulent conduct,” including opening customer accounts and issuing credit cards without authorization to do so. The suit also alleges that Wells Fargo collected fees on these unauthorized accounts and failed to notify consumers of the charges or refund the fees once the unauthorized accounts were discovered by consumers.

In addition, Wells Fargo is accused of engaging in other illegal practices, including:

  • Withdrawing funds from authorized accounts to pay fees on unauthorized accounts;
  • Placed customer accounts into collection when unauthorized fees were unpaid;
  • Penalized customer’s credit reports when unauthorized fees were unpaid;
  • Enrolling customers in online banking and online bill paying services without their consent;
  • Stockpiling applications to be opened at a later date to meet future sales quotas, thus denying customers access to their funds.

The suit charges Wells Fargo with violations of the Unfair Competition Law (“UCL”) and asks for a civil penalty of $2,500 for each violation of the UCL as well as unspecified restitution to harmed consumers.

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