Former Wells Fargo Employees Sue Bank, Allege Firings Were Retaliation for Not Breaking Law
Two employees are seeking at least $2.6 billion in damages
Two former Wells Fargo employees are suing the embattled bank for allegedly firing them as retaliation for not engaging in the illegal practice of opening unauthorized accounts to meet sales goals.
The class-action lawsuit, filed on behalf of all Wells Fargo employees penalized for not meeting sales goals during the past 10 years, seeks $2.6 billion in damages.
Earlier this month, the Consumer Financial Protection Bureau fined the bank $185 million due to the illegal practice of opening more than two million bank accounts without customer knowledge or authorization. The bank agreed to pay the fine, says NPR, and it also claimed that it had refunded affected customers $2.6 million and fired more than 5,300 lower-level employees.
This suit, filed in a California court, focuses on a set of people affected by the fraud whom few have paid attention to so far: the bank employees fired for not breaking the law.
"The biggest victims of this scheme are a class of people that nobody else has talked about," the lawsuit says. "The biggest victims of Wells Fargo's scam [are] the class of victims that were fired because they did not meet these cross sell quotas by engaging in the fraudulent scam that would line the CEO's pockets."
The suit argues that although bank executives and stockholders profited from the fraud and affected customers will "undoubtedly" be refunded the fees for opening the accounts, the people whom the bank fired for refusing to break the law have been ignored.
It alleges that the sales goals were "unrealistic," "impossible," and "unreachable," and that employees were unable to meet them on a consistent basis without resorting to fraud or somehow "gaming" the system in another way. Bloomberg reports that they were allegedly "coached" and pressured to open at least 10 new accounts per day and often had to resort to using fake contact information such as "NoName@WellsFargo.com" for the unauthorized accounts so they could not trace the accounts back.
"Thousands of employees who failed to resort to illegal tactics were either demoted or fired as a result," it states. Such tactics included "sandbagging," the opening of a fake account the day after the bank was instructed not to do so by the customer; "pinning," the assignation of a personal identification number (PIN) without a customer's consent; and "bundling," lying to a customer about the limited availability of certain products included in a package.
Among the allegations included are wrongful termination, unlawful business practices, and failure to pay overtime, says the complaint, and the plaintiffs are seeking $2.6 billion in damages "and possibly more."
The fraud allegedly was "set at the top and directed toward the bottom," says the suit. "Wells Fargo knew that their unreasonable quotas were driving these unethical behaviors that were used to fraudulently increase their stock price and benefit the CEO at the expense of the low-level employees. Although this policy was known to top executives of defendants, plaintiffs, as bankers, were blamed for harm to clients and retaliated against."
John Stumpf, chairman and CEO of Wells Fargo, has claimed "full responsibility" for "all unethical sales practices." In a hearing with a Senate panel last week, however, Senator Elizabeth Warren pulled no punches.
"And when it all blew up, you kept your job, you kept your multi-multimillion-dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich," Senator Warren told Stumpf.
Bloomberg reports that customers and investors have also filed lawsuits against the bank.