Last month, the Consumer Financial Protection Bureau (CFPB) announced that Wells Fargo Bank, N.A. agreed to pay a fine of $100 million for its “widespread illegal practice of secretly opening unauthorized deposit and credit card accounts.” Wells Fargo further agreed to pay $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. Specifically, the CFPB found that Wells Fargo:

  • “opened unauthorized deposit accounts for existing customers and transferred funds to those accounts from their owners’ other accounts, all without their customers’ knowledge or consent;
  • submitted applications for credit cards in consumers’ names using consumers’ information without their knowledge or consent;
  • enrolled consumers in online-banking services that they did not request; and
  • ordered and activated debit cards using consumers’ information without their knowledge or consent.”

Wells Fargo employees “requested and issued debit cards without consumers’ knowledge or consent, going so far as to create PINs without telling consumers.” These employees also, “created phony email addresses not belonging to consumers to enroll them in online-banking services without their knowledge or consent.”

In the wake of that initial announcement, Wells Fargo has faced public criticism, congressional pressure, investigations from U.S. Attorneys, and civil lawsuits concerning its widespread scheme. Class action lawsuits have been filed on behalf of Wells Fargo customers who were victim to this widespread scheme.

A previous class action lawsuit was filed in 2015 on behalf of customers, and Wells Fargo purportedly agreed to settle that action around the same time it agreed to the CFPB penalties. At press time, the settlement of the 2015 action had not yet been submitted to the court for approval. Class action lawsuits have also been filed on behalf of Wells Fargo employees who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, forced to resign or fired.

Wells Fargo and its leadership are also facing another type of lawsuit arising as of this illegal scheme, and it was brought on behalf of its shareholders. The shareholder class actions allege that Wells Fargo’s senior ranks created an incentive system that allowed the fraud to occur, enabling the institution to meet sales targets and boost its bottom line. The allegations accuse Chief Executive Officer John Stumpf, Carrie Tolstedt (the now-retired executive at the center of the scandal) and other leaders of breaching their fiduciary duty, unjust enrichment and corporate waste. These shareholder lawsuits seek damages on behalf of the company. I will be shocked if persons other than the employees who were filed didn’t have knowledge of what was going on. If you need more information, contact Leslie Pescia, a lawyer in our firm’s Consumer Fraud and Commercial Litigation Section, at 800-898-2034 or by email at Leslie.Pescia@beasleyallen.com.

Sources: Consumer Financial Protection Bureau and Bloomberg

We're here to help!

We live by our creed of “helping those who need it most” and have helped thousands of clients get the justice they desperately needed and deserved. If you feel you have a case or just have questions please contact us for a free consultation. There is no risk and no fees unless we win for you.

Fields marked * may be required for submission.

Impressed with the Beasley Allen staff

I am very impressed with the Beasley Allen staff. They were very courteous and patiently explained the aspects of my claim in a way I could understand. If I ever have any need of an attorney in the future I will turn to Beasley Allen.

—Philip