Rigid sales quotas at Wells Fargo Bank have driven employees to open unauthorized accounts for customers, sticking them with bogus fees and damaging their credit, according to a city of Los Angeles lawsuit that echoes a Times investigation.

The civil complaint, filed Monday in state court in Los Angeles by City Atty. Mike Feuer, says the largest California-based bank encouraged its employees to engage “in unfair, unlawful and fraudulent conduct” through a pervasive culture of high-pressure sales. Employees misused customers’ confidential information and often failed to close unauthorized accounts even when customers complained, the suit alleges.

Some employees went so far as to raid client accounts for money to open additional accounts, the suit alleges.

“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 alleges.


Wells has blamed the problems on a few rogue employees who the bank has appropriately disciplined or fired. The city’s investigation, however, found only token efforts by Wells to prevent customer abuses.

“On the rare occasions when Wells Fargo did take action against its employees for unethical sales conduct, Wells Fargo further victimized its customers by failing to inform them of the breaches, refund fees they were owed, or otherwise remedy the injuries that Wells Fargo and its bankers have caused,” according to the suit.

Wells Fargo has long boasted to investors of its unrivaled success in selling additional accounts and services to customers. In a statement, the bank said it would vigorously defend itself against the allegations.

“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 bank said. “This includes training, audits and processes that work together to support our Vision & Values and our commitment to customers receiving only the products and services they need and will benefit from.”


The suit was filed under an unfair-business-practices law that permits attorneys representing large California cities to seek redress for customers throughout the state. It contends Wells Fargo employees violated state and federal laws by misusing confidential information and by failing to notify customers when their personal data were breached.

“We’re very concerned that consumers be told whenever their information is used for unauthorized purposes,” Feuer said.

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. If it succeeds in Los Angeles County Superior Court, it would apply to all residents of the county and perhaps to people outside its boundaries, Feuer said.

Feuer said he began investigating in reaction to a December 2013 Times story on sales pressure at Wells Fargo branches across the country. The story relied on about three dozen former and current Wells staffers, along with a review of internal bank documents and lawsuits filed against the bank.


The employees described how staffers, fearing retribution from managers, begged friends and family members to open ghost accounts; opened accounts that they knew customers didn’t want; forged signatures on account paperwork; and falsified phone numbers of angry customers so they couldn’t be reached for customer satisfaction surveys.

“Your work was the catalyst for ours,” Feuer said in an interview.

In addition to charging fees on unwanted accounts, San Francisco-based Wells Fargo harmed customers by placing them into collections based on unauthorized withdrawals and reported damaging information on their credit reports when unwarranted fees went unpaid, the suit alleges.

After the December 2013 Times story, dozens of employees and customers reported similar problems, and those complaints continue today.


Siham El-Dahan said she has held financial services jobs for more than 20 years and joined Wells in May 2013, working as a business banker in the San Fernando Valley until she was fired two weeks ago.

El-Dahan said she sought help from the bank’s human-relations department beginning in September. She said her managers played favorites, denied employees’ breaks that are required by law and regularly threatened employees about meeting sales quotas.

Employees responded by opening bogus accounts for customers who didn’t want them on a “daily” basis, she told The Times.

When she asked to be transferred to another branch, she was referred back to her managers, she said. An emailed letter of complaint to bank directors and a signed letter to Wells Fargo’s chief executive, John Stumpf, drew no response, El-Dahan said.


She believes she was fired in retaliation for speaking out. The stated reason was that a customer she signed up for a loan had defaulted, but she said she had nothing to do with the underwriting or approval of the loan.

Customers continue to report problems too. Frank Ahn, who runs a San Fernando Valley convenience store, said Wells overwhelmed him by opening one unwanted account after another — despite his repeated protests.

It started four years ago, he said, when he opened two accounts. Immediately, bank employees started pitching him on more accounts he didn’t need, sometimes saying they must be opened by certain dates, which he interpreted as deadlines to meet quotas.

After repeated phone calls, Ahn said, he opened a third account he didn’t need, as a favor to the banker. He was told there would be no charge, got charged anyway, then canceled the account,


“Then a couple of months later, I got three new accounts and a credit card I hadn’t asked for,” Ahn said. “I called the 800 number and said I want them canceled. They would cancel them, but more would pop up later.”

Ahn then went into the branch to complain and have the accounts canceled.

“They said, ‘We’ll get rid of them,’ but they never did,” he said. “It got to where I had 10 accounts.”

Eventually, Ahn said, he got most but not all of the improper fees reversed. He would have switched to another bank, he said, but too many of his dozens of suppliers are connected to the account, making it impossible to untangle the payment systems.


Ahn, 33, who grew up in the Valley, said he feels sorry for people like his parents, immigrants from South Korea, who would not have the English skills to conduct what Ahn calls “a three-year battle” with Wells Fargo.

“This is making me a less productive person,” he said. “I should be spending my time improving the productivity of my business instead of this.”

Wells Fargo declined to comment on El-Dahan’s and Ahn’s stories.

Scott.reckard@latimes.com


Twitter: @ScottReckard



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