(Reuters) - The city of Los Angeles has sued Wells Fargo & Co, accusing the bank of driving its employees to open unauthorized customer accounts, charging them “bogus” fees and damaging their credit, the Los Angeles Times reported.
The civil complaint, filed on Monday, says the largest U.S. mortgage lender encouraged employees to engage in "unfair, unlawful and fraudulent conduct" through a pervasive culture of high-pressure sales, the newspaper reported. (lat.ms/1R8o6D8)
Wells Fargo, in a reply to an email query by Reuters, said it would “vigorously defend” the allegations.
The lawsuit alleges that employees misused customers’ confidential information and often failed to close unauthorized accounts even when customers complained, according to the paper.
“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 report quoted the lawsuit, filed in a Los Angeles court by City Attorney Mike Feuer.
Wells Fargo has blamed the problems on a few “rogue” employees, who the bank says it has “appropriately disciplined” or fired. The city’s investigation, however, found only token efforts by the largest California-based bank to prevent customer abuses, the LA Times reported.
The lawsuit seeks a court order shutting down the alleged wrongdoing, along with penalties of up to $2,500 for every violation and restitution for customers who were harmed, according to Feuer.
Reporting by Avik Das and Ankush Sharma in Bengaluru; Editing by Gopakumar Warrier and Kirti Pandey
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