Wells Fargo Faces Lawsuits in the Wake of Unauthorized Accounts Scandal

Lev Craig

On September 8, Wells Fargo was fined $100 million by the Consumer Financial Protection Bureau (CFPB)—the largest fine in the agency’s history, according to its director—after an investigation found that bank employees had opened over two million bank accounts and credit cards without customers’ knowledge or consent between May 2011 and July 2015.

In addition to fines, Wells Fargo will be required to compensate any affected customers for fees incurred on the unauthorized accounts, such as annual fees or overdraft fees. On September 16, three plaintiffs in Utah filed suit against Wells Fargo, alleging theft and fraud and seeking class action status on behalf of up to a million customers who may have been affected.

When the scandal came to light, Wells Fargo confirmed that it had fired approximately 5,300 employees—around 1% of the company’s total workforce—due to “inappropriate” conduct in relation to the creation of unauthorized accounts. Now, former employees of Wells Fargo have stepped forward, claiming that Wells Fargo retaliated against them for whistleblowing and for refusing to participate in the illegal activity.

Earlier this week, U.S. Secretary of Labor Tom Perez stated that the Department of Labor (DOL) would conduct a review of all complaints and charges filed with the DOL regarding Wells Fargo in recent years, stating, “Given the serious nature of the allegations, the recent actions of our federal partners, and recent media reports, I have directed enforcement agencies within the Department to conduct a top-to-bottom review.” He also announced that the DOL was creating a page for current and former Wells Fargo employees on its website—https://www.dol.gov/wellsfargo/—to make workers aware of their legal rights and provide links to resources for those who wanted to raise concerns about potentially unlawful conduct at Wells Fargo.

A number of Wells Fargo employees have come forth with stories of retaliation, saying that management assigned impossibly high sales quotas, directly instructed low-level workers to mislead customers and create the unauthorized accounts in order to meet those quotas, and retaliated against employees who complained or did not comply. For example, former Wells Fargo employee Bill Bado states that he refused to follow directives to open unauthorized customer accounts, then contacted Wells Fargo’s ethics hotline and HR department—and was terminated a week after doing so.

On September 22, two former Wells Fargo employees filed a class-action suit in California on behalf of current and former Californian Wells Fargo employees who were “demoted, forced to resign, or terminated” for refusing to engage in the practice of opening accounts without customers’ permission. They allege that management pressured employees to meet “impossible” sales goals and demoted or terminated them when they refused to do so or questioned the illegal behavior. And on September 27, former employees filed another class-action suit against Wells Fargo, this time in federal court. The federal suit not only alleges violations of several whistleblower laws, including Dodd-Frank and Sarbanes-Oxley, but also claims that Wells Fargo violated the Fair Labor Standards Act when it required employees to work overtime hours without compensating them at the overtime premium rate.

If your employer has retaliated against you for raising concerns about unlawful or unethical activity, please contact The Harman Firm, LLP.