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CRIME

Los Angeles sues Wells Fargo, alleging workers opened unauthorized accounts that charged fees

Associated Press
Published | Updated
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    A downtown building is reflected in the windows of the Wells Fargo Bank in Los Angeles on Tuesday, May 5, 2015. The city of Los Angeles is suing Wells Fargo Bank, alleging that employees driven by strict sales pressure opened unauthorized accounts for customers that charged them fees and damaged their credit. (AP Photo/Richard Vogel) (The Associated Press)

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    A customer arrives at a Wells Fargo Bank branch in downtown Los Angeles on Tuesday, May 5, 2015. The city of Los Angeles is suing Wells Fargo Bank, alleging that employees driven by strict sales pressure opened unauthorized accounts for customers that charged them fees and damaged their credit. (AP Photo/Richard Vogel) (The Associated Press)

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    Pedestrians walk past the Wells Fargo Center in downtown Los Angeles on Tuesday, May 5, 2015. The city of Los Angeles is suing Wells Fargo Bank, alleging that employees driven by strict sales pressure opened unauthorized accounts for customers that charged them fees and damaged their credit. (AP Photo/Richard Vogel) (The Associated Press)

LOS ANGELES – The city of Los Angeles is suing Wells Fargo Bank, alleging that employees driven by strict sales pressure opened unauthorized accounts for customers that charged them fees and damaged their credit.

The civil complaint was filed Monday under a law that allows attorneys representing large California cities to seek relief for unfair business practices for customers statewide, the Los Angeles Times reported (http://lat.ms/1R8o6D8 ). It contends Wells Fargo employees violated state and federal laws by misusing confidential information and failing to notify customers when personal information was breached.

Wells Fargo has blamed the problems on a few rogue employees who have been disciplined or fired and said it would defend itself.

"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," the San Francisco-based bank said in a statement.

But the city's investigation found only token efforts to prevent wrongdoing, the newspaper said.

The lawsuit seeks a court order ending the practices the city alleges, along with penalties of up to $2,500 for every violation and restitution for affected customers. The newspaper didn't say how many violations were alleged. If the suit prevails in Los Angeles County Superior Court, it would apply to all county residents and possibly some customers farther away, City Attorney Mike Feuer said.

The largest California-based bank had a culture of high-pressure sales that pushed employees toward "fraudulent conduct," Feuer said. Employees misused customers' confidential information and often failed to close unauthorized accounts despite complaints, the suit said.

Some employees raided customer accounts for money to open more accounts, according to court papers.

"The result is that Wells Fargo has generated a virtual fee-generating machine, through which its customers are harmed, its employees take the blame, and Wells Fargo reaps the profit," the lawsuit claims.

Feuer planned to discuss the allegations at a Tuesday press conference at Los Angeles City Hall.

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Information from: Los Angeles Times, http://www.latimes.com/