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Wells Fargo accused of duping customers, investors

If you are a Wells Fargo Bank customer and have discovered that there are unauthorized accounts open in your name, or that you have services being billed to your account that you have not asked for, chances are that you are not alone. According to a recent LATimes.com report, the City of Los Angeles has initiated a lawsuit against the banking giant alleging that it engaged in “unfair, unlawful and fraudulent conduct” in opening bogus accounts for customers that would result in fees and charges that they could not afford.

The charges and the subsequent financial problems would lead to credit issues that would further harm customers. In addition to opening ghost accounts, the city also claims that Wells Fargo also failed to close such accounts in a timely manner and even misused customers’ sensitive financial information. 

Indeed, the fraud towards customers is problematic, because a bank is supposed to give customers’ peace of mind in safeguarding their money; but it is equally destructive to investors’ confidence. Wells Fargo reportedly boasted to investors about its ability to sell additional services and accounts to its customers, which would drive up revenues for the bank (as well as dividends for investors).

Naturally, Wells Fargo denies these allegations, and has also explained that the scheme of coercing customers into unnecessary accounts was only limited to a few rogue employees, who have since been fired. However, the City claims that Wells did not act swiftly or adequately enough to limit the damage caused to consumers.

In the meantime, it remains to be seen whether the fraud suit will be settled and what will become of the people who were helping with the scheme. 

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