Wells Fargo agreed to pay $3 billion to settle civil and criminal charges filed by the Justice Department for creating millions of fake bank accounts in the names of customers without their knowledge or consent. The accounts were set up by thousands of bank employees under pressure to meet sales quotas. By the time the fraudulent sales practice came to light, it had been going on for more than a decade. Wells Fargo was subsequently hit with a deluge of lawsuits.
Wells Fargo also attempted to conceal the fraudulent accounts from customers by forging signatures and preventing other bank employees from contacting the customers during routine calls regarding their accounts.
“This settlement holds Wells Fargo accountable for tolerating fraudulent conduct that is remarkable both for its duration and scope and for its blatant disregard of customer private information,” said Michael Granston of the Justice Department’s Civil Division.
The $3 billion Wells Fargo has agreed to pay will not go to compensate consumers. The bank is making separate efforts to reimburse customers for losses such as fees they may have been charged or any harm to their credit rating caused by the scandal.
Wells Fargo was also hit with a proposed class action lawsuit alleging that executives overseeing the bank’s 401(k) plan were misguided by their conflict of interest, and that under the Employee Retirement Income Security Act (ERISA), the company and its top executives are liable for the reduced value of the bank’s 401(k) plan because they did not disclose the unethical sales practices of members of its staff in a timely manner.
Lawyers at Beasley Allen have handled a variety of claims for individuals who have been affected by Wells Fargo’s fraudulent activity. For more information on this subject, contact Dee Miles, Consumer Fraud Section Head, or other lawyers in the section who are working on these types of cases: Lance Gould, Leslie Pescia, James Eubank, Rachel Boyd and Paul Evans.